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Denver’s Job Market Gains Momentum After Sluggish 2023

Unemployment Rate Falls in April

Denver’s job market has gained momentum this year after a hiring pullback through most of 2023.

 

The market’s unemployment rate fell to 3.5% in April, according to the latest jobs report from the Bureau of Labor Statistics, down from the recent peak of 4.2% in February.

 

The region added 18,300 jobs in the first four months of 2024, driven by a few key sectors.

 

Notably, employment in higher-paying jobs, which can have a multiplier effect in further job creation, is picking up. The office-using professional and business services sector leads in job gains year to date, adding 7,000 positions. Jobs in this sector pay an average of about 20% above the Denver metropolitan annual mean wage, according to BLS data.

 

The government sector continues to outperform and is now above pre-pandemic staffing levels. Overall, about 6,600 jobs were added since the start of the year.

 

Only two sectors shed jobs during the first four months of the year. This includes the information sector, which contracted by 1,000 jobs due to persistent weakness in the technology industry.

 

Additionally, payrolls in the industrial-using trade, transportation and utilities sector fell by 4,600 jobs this year. Denver’s population growth slowed in recent years, which has had a delayed negative impact on local industrial demand.

 

Denver is geographically isolated, and distributors need to have a local presence to reach the Front Range consumer base and satisfy fast delivery expectations. This generated outsize industrial demand when population growth was strong, but it is not the tailwind that it once was, and logistics firms have trimmed headcounts to right size operations.

 

Conversely, the manufacturing sector continues to grow, adding 1,100 jobs year to date. Momentum in this sector could continue through the next year. PepsiCo’s new manufacturing facility, which will be its largest plant in North America, is expected to open near Denver International Airport in 2025. The company plans to hire an additional 250 workers at the location.

 

While hiring has picked up, the recent gains were not enough to make up for job losses in 2023. Annually, the Denver metropolitan area has lost roughly 9,900 jobs. While the unemployment rate fell in recent months, it is still up 80 basis points from a year ago.