Colorado has experienced an increase in unemployment over the past year, with its jobless rate surpassing the national average—a situation that has only occurred once before in the past five decades. The recent rise in unemployment has been linked to downturns in the technology and construction sectors, two industries where Colorado’s workforce is more concentrated compared to the rest of the country.
Starting in early 2024, Colorado’s unemployment rate moved above the national average, reversing a long-standing trend where the state’s jobless rate typically remained lower than the country’s overall figure. Historically, Colorado’s unemployment rate averaged 5.2 percent since the 1970s, compared to 6.1 percent for the U.S. The last period when Colorado’s unemployment rate persistently exceeded the national average was during the late 1980s, which followed a downturn in oil prices that impacted the state’s then-concentrated oil and gas industry.
The current period of elevated unemployment, which began in 2024, is characterized by increased job losses in technology and construction. According to data from the Department of Labor, technology-related unemployment insurance claims in Colorado rose by over 62 percent in 2025 relative to the 2017-19 average, while construction claims increased by 42 percent. Nationally, technology sector claims grew by 19 percent, and construction claims declined.
Colorado’s technology industry accounted for 12.5 percent of state employment between 2022 and 2024, higher than the U.S. average of 8.8 percent. Construction represented 6.3 percent of employment in Colorado, compared to 5.1 percent nationally. The decline in residential and commercial development has contributed to weaker conditions in these sectors within the state.
Job market indicators also reflect softer labor conditions. The ratio of job vacancies to unemployed individuals, a common measure of labor market tightness, dropped below the national average in Colorado by late 2024. Job openings in Colorado fell by about 13 percent through July this year, compared to a roughly four percent decline nationwide, according to the Bureau of Labor Statistics.
Despite these challenges, Colorado’s labor force remains robust. The state’s labor force grew by about 12 percent since 2017, outpacing the national growth rate of seven percent. This growth is attributed largely to positive net migration, which brings skilled workers to Colorado. Additionally, Colorado’s labor force participation rate is significantly higher than the national average—67.7 percent versus 62.4 percent in 2025—indicating a larger share of the population is working or seeking work.
Educational attainment among Colorado’s workforce also exceeds national levels, contributing to a higher skill base within the state.
“Colorado benefits from a mobile, highly engaged, and educated labor force, poising the local labor market for improvement if conditions were to strengthen in the sectors currently facing headwinds,” the report states.
The report concludes: “Colorado’s unemployment rate surpassed the U.S. in the last year, which only happened one other time in the last 50 years. Recent weakness in Colorado’s labor market can be attributed to a downturn in the technology and construction industries. While Colorado’s unemployment rate is trending downward in recent months, the state continues to face softer labor conditions than the national average. Despite relatively soft labor market conditions, Colorado’s highly engaged labor force may place the state at a longer-term advantage, positioning the state for growth if economic conditions in the challenged sectors of Colorado’s economy were to improve.”
