Colorado job market still has some weak spots because of interest rates

Colorado's latest job reports are showing some weak spots. Preliminary estimates from the state's labor department show that Colorado gained 1,500 jobs last month, but the private sector lost jobs, covering up the loss with 1,700 government jobs.

According to state economist Ryan Gedney, the construction industry has taken the biggest hit with higher interest rates being the main culprit.

The construction industry is known to be sensitive to interest rates, as it relies on borrowing money for projects. With federal regulators using higher interest rates to tame the economy, it's no surprise that construction jobs are taking a hit.

However, it's not just the construction industry that's feeling the squeeze. Financial analysts are predicting an end to interest rate hikes after the U.S. Labor Department reported the lowest inflation in two years for October.

This news may bring relief to some industries, but for the job market in Colorado, it's a different story.

While the job market in Colorado has remained relatively stable, there is still cause for concern. The government continues to add the most jobs, while the private sector has lost jobs in six of the past 12 months, according to Gedney. He also predicts that the gap between Colorado's job growth rate and the U.S. rate will shrink when updated figures are released.

Despite a slight uptick in the unemployment rate from 3.2 percent to 3.3 percent, economists are keeping a watchful eye for signs of recession. Gedney cautions that there are pockets of concern, such as the struggling construction industry and potential trouble spots in agriculture and financial activities.

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The labor department's monthly job numbers have been volatile recently, making it difficult to draw clear conclusions from just one month of data. Gedney suggests waiting for the updated estimates, covering April, May, and June, which will show that private sector jobs have been significantly undercounted. Companies' lack of response to monthly surveys is partially to blame for this discrepancy.

While the economy may not be headed for a recession just yet, it's clear that there are some weak spots in Colorado's job market. Gedney shares a mixed final message, "We might be seeing a divergence of some strong growth industries and some weaker growth industries."