Understanding Colorado’s evolving labor force clarifies how demographic shifts impact hiring trends. Focusing on these workforce trends helps employers adjust their hiring strategies to stay ahead of labor market challenges.
Colorado’s Labor Force Participation Rate 2025
According to the Federal Reserve Bank of St. Louis, Colorado’s labor force participation rate in January 2025 was 68% seasonally adjusted, slightly up from 67.9% the previous month. The state’s unemployment rate during the same time was 4.7% seasonally adjusted.
The Colorado Department of Labor and Employment’s Colorado Employment Situation – January 2025
press release reported the following:
Household survey data
- Labor force: Colorado’s labor force increased by 4,800 to 3,284,500 in January.
- Number of individuals employed: The number of individuals employed in Colorado increased by 2,200 to 3,131,800 in January, representing 64.8% of the state’s 16+ population.
- Number of unemployed individuals: The number of unemployed individuals grew by 2,600 to 152,800 between December and January.
- Employment-population ratio: Colorado’s employment-population ratio of 64.8 in January was unchanged compared to the December rate.
Establishment survey data
- Nonfarm payroll jobs: Employers in Colorado added 3,900 nonfarm payroll jobs from December to January for 2,981,000 jobs total.
- Private sector payroll jobs: Private sector payroll jobs grew by 1,800.
- Government payroll jobs: Government payroll jobs rose by 2,100.
- Private industry sectors with significant job gains in January: Educational and health services (≈2,500), professional and business services (≈1,100), and manufacturing (≈1,100).
- Job loss: Significant private sector job loss occurred in construction (≈2,400) and leisure and hospitality (≈1,000) over the month.
Colorado’s Projected Economic Growth
The Colorado Business Economic Outlook 2024 anticipates the state’s economy will continue slowly growing in 2025. The forecast projects job growth of 1.2% for an additional 36,700 jobs this year. The factors contributing to this growth include a strong labor market, population expansion, and continued development in key industries.
Slower job growth than in recent years is expected due to population growth slowing, causing challenges for job expansion. Slow net migration and increasing retirements will contribute to Colorado’s ongoing labor shortage.
Economic growth trends and challenges
These trends and challenges shape Colorado’s economic outlook for 2025:
- Regulatory and policy uncertainty: Tax cuts could boost Colorado’s economy in the short term by increasing demand, depending on their size and how they are financed. Tariffs might create inflationary pressures. New immigration policy could impact the state’s labor force.
- Worker shortage: Colorado’s labor force participation rate will remain below pre-pandemic levels, with many jobs going unfilled.
- Artificial intelligence: The Colorado Artificial Intelligence Act, passed in May 2024, is the first comprehensive US state law regarding AI development and deployment. Taking effect in February 2026, the law aims to prevent algorithmic discrimination in AI systems used for job screening.
- Housing: Higher mortgage rates and limited housing supply create affordability challenges, especially for workforce housing.
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