Is the Colorado Economy More of a Train Wreck than it Currently Appears?

By Mike O’Donnell | Guest Commentary, Rocky Mountain Voice

Given all the sad news last week, a September 9 press release from the U.S. Bureau of Labor Statistics (BLS) announcing a major downward revision in job numbers for March 2024 to March 2025 was understandably overlooked.

The serious implications the announcement had for the national and especially the Colorado economies still, nonetheless, remain today.

Revisions to BLS jobs numbers are normal and happen annually because the monthly estimates of how many new jobs are being created or lost in the economy come from surveys of around 121,000 businesses representing about 631,000 individual worksites. Because companies come and go, the BLS combines their survey data with estimates of how many net new jobs are being created at businesses not yet included in the surveys.

Apparently only once each year, in March, the BLS is able to get the full picture of how many jobs are being added to the economy, industry by industry, by accessing state unemployment insurance tax records that represent about 95% of all the jobs in the nation.

Usually the annual revisions adjust the number of new jobs being created by a factor of around 0.2% (this has been the average adjustment over the last ten years). This latest revision, however, was an unprecedented 0.6%—three times greater than usual—and resulted in a correction that removed 911,000 jobs from the numbers the BLS originally reported.

BLS identified both response errors (businesses claiming they were hiring more employees than they actually did) and non-response errors (businesses who didn’t respond were creating far fewer actual jobs than the businesses who did respond) as the primary reasons why the numbers were “off” so much, although they haven’t yet definitely determined whether it was those survey errors or because fewer new businesses opened or more businesses closed than they were predicting.

(It definitely wasn’t the agency over-reporting numbers to make the last year of the Biden/Harris administration look better than it was. No independent public-facing agency would EVER risk doing that.)

The bottom line is that instead of around 1.7 million new jobs being created nationwide between March 2024 and March 2025, there were only around 800,000 odd—an average of 76,000 FEWER new jobs per month than reported. (The final numbers won’t be officially published until February 2026, so we will know for sure then.)

The implications for Colorado’s job creation numbers could be catastrophic!

Between March 2024 and March 2025, Colorado added just 3,100 jobs—near the bottom nationally—while BLS revisions may show even deeper losses. Source: U.S. Bureau of Labor Statistics. Chart Prepared by Mike O’Donnell.

During that same twelve-month period, March 2024 to March 2025, BLS data shows that only 3,100 new jobs were created in Colorado, one of the smallest percentage new job growth gains in the nation.

A 0.6% downward revision to Colorado’s employment numbers would remove more than 15,000 jobs from that count, and even a 0.2% BLS revision would cut more than 4,000 jobs from Colorado’s numbers. Both scenarios take the state into job loss territory, signaling tougher times ahead for Colorado residents and likely necessitating future budget cuts to many services.

So why has hiring across most industry groups apparently been slowing so much more than the white coats in D.C. and Denver thought it was?

• Some of it has to do with the adoption of artificial intelligence (AI). Several surveys conducted by Federal Reserve branches show that companies incorporating AI into their business models are hiring 12% fewer workers because of it.

• Some of it has to do with businesses consolidating workforces in a post-pandemic economy, eliminating positions that are no longer necessary.

• And some of it has to do with weaker consumer demand because of inflation and especially the cost of housing, together with business uncertainty over the near-term economic outlook—although you wouldn’t know that if you only follow the stock market.

The only slightly ‘positive’ that comes out of the BLS revision to the jobs numbers, coupled with the higher-than-anticipated August inflation number (primarily fueled by the increasing cost of “shelter” in the United States), is that the Federal Reserve will likely start dropping interest rates soon.

But that won’t help Colorado regain its status as an engine of economic growth unless there are drastic changes to current state government policies. Until then, employees may choose to seek their fortunes in other, more business-friendly states.

There are interesting times ahead.

Mike O’Donnell is a small business advocate, nonprofit executive and economic development leader based in Kirk, Colorado. He currently serves as Executive Director of Prairie Rose Development Corp., a mission-driven lender supporting underserved entrepreneurs across the state.

Editor’s note: Opinions expressed in commentary pieces are those of the author and do not necessarily reflect the opinions of the management of the Rocky Mountain Voice, but even so we support the constitutional right of the author to express those opinions.