Colorado's job market sent mixed signals in September, with employment growing at the same time that unemployment and labor force participation moved in opposite directions. The Colorado Department of Labor and Employment's monthly report, released Friday, found that the state's unemployment rate climbed one-tenth of a percentage point to 4.1 percent, compared with 4.0 percent the month before.
August had been the point at which Colorado's unemployment rate first pushed past the 4 percent mark since June 2025, having held steady at 3.9 percent every month between January and July. The national unemployment rate for September came in at 4.2 percent, with 7.1 million Americans out of work according to the Bureau of Labor Statistics — a figure that has remained above Colorado's for more than a year, though the two continue to converge.
Colorado counted 131,900 unemployed residents in September, a rise of 3,800 from August, even as the state netted 2,400 jobs over the same month-to-month period. Within that total, private-sector payrolls grew by 3,000 positions, while government employment contracted by 600.
The Friday report also carried revised figures for August, showing that month's job losses were considerably smaller than the initial estimate had suggested — down from a projected loss of 1,400 positions to just 300.
The state's labor force contracted by 3,100 in September, pulling the labor force participation rate — the proportion of residents aged 16 or older who are either employed or actively looking for work — to 65.2 percent, one-tenth of a point below August and the lowest such figure in records stretching back to 1976.
Zooming out to the full year since September 2025, Colorado has grown its total employment by 11,200 jobs, with the private sector accounting for a gain of 17,000 while government payrolls shrank by 5,800. Over that twelve-month span, the sectors posting the strongest private gains included healthcare and education, hospitality, construction, and professional services, whereas industries such as finance, information, manufacturing, and trade and transportation shed workers. Colorado's year-over-year job growth rate of 0.4 percent edged just above the national pace of 0.3 percent.
Whether the record-low labor force participation rate represents a lasting trend or a seasonal fluctuation is a question the state's next monthly report will help answer.