The Colorado Department of Labor and Employment’s Colorado Employment Situation January 2025 shared the following household survey data:
- Colorado’s seasonally adjusted unemployment rate increased one-tenth of a percentage point in January to 4.7% compared to the previous month. The number of unemployed individuals grew by 2,600 to 152,800 during the same period. The national unemployment rate decreased one-tenth of a percentage point to 4% from December to January.
- Colorado’s labor force increased by 4,800 in January to 3,284,500. The number of Coloradans participating in the labor force increased to 68% in January, compared to 67.9% the prior month. The U.S. labor force participation rate was 62.6% in January, one-tenth of a percentage point higher than the previous month.
- The number of individuals employed in Colorado increased by 2,200 in January to 3,131,800, representing 64.8% of the state’s 16+ population. Colorado’s employment-population ratio of 64.8 in January was unchanged compared to the December rate. The national employment-population ratio increased one-tenth of a percentage point in January to 60.1%.
Colorado’s Growing Economy
The Business Research Division at the Leeds School of Business expects Colorado’s economy will continue growing in 2025. Based on a collaboration with the State of Colorado and insights from over 140 leaders in the business, education, and government sectors, research participants anticipate job growth of 1.2% in 2025. An additional 36,700 jobs are projected throughout the state, with 10 of Colorado’s 11 top industries expected to add jobs.
Factors Impacting Colorado’s Economic Growth
Population expansion, continued investment in key industries, and a strong labor market contribute to Colorado’s growth in 2025. However, the state’s economy is slowing, with more moderate employment and gross domestic product (GDP) growth anticipated.
Job growth issues
Although Colorado had a top-performing state economy following the financial crisis until 2023, it is currently closer to the middle. Slower economic growth could become the state’s new norm as population growth slows, especially from net migration. Reduced growth could cause challenges for the labor force and job expansion.
Labor supply challenges
Slow net migration and increasing retirements contribute to Colorado’s ongoing labor shortage. Although Colorado added an estimated 46,800 jobs in 2024, a growth of 1.6% over 2023, more modest job growth rates are expected in 2025. All industries except information are expected to add jobs, led by education, health services, government, and construction.
Colorado’s Growing Population
After rapid expansion during the 2010s, Colorado’s population growth is slowing. Following an increase of 43,000 in 2024, the population is expected to grow by 51,000 in 2025. Births, net migration, and deaths contribute to these projections.
Declining birth rates, an aging population, and increased labor competition contribute to Colorado’s slowing long-term population growth. However, the state should continue outpacing the national average, growing at approximately twice the national rate.
Trends Impacting Colorado’s Economic Outlook
The following trends are shaping Colorado’s economic outlook in 2025:
- Regulatory and policy uncertainty: Tax cuts could boost Colorado’s economy in the short term by increasing demand, depending on their size and financing. Tariffs might create inflationary pressure. New immigration policy could impact the labor force.
- Labor shortage: Many jobs remain unfilled because Colorado’s labor force participation rate is below pre-pandemic levels. The state’s October 2024 labor force participation rate was 62.6%, compared to 63.3% in January 2020.
- Artificial intelligence: The Colorado Artificial Intelligence Act, which takes effect in February 2026, 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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