Unemployment in Colorado ticked up to 3.4% in January from 3.3% in December, according to the latest numbers available from the Colorado Department of Labor and Employment released Monday.

Colorado’s jobless rate increased slightly over 12 months from 3%, but has consistently stayed below the national average of 3.7%. December’s original unemployment level was reported as 3.4% in January, but the number was revised slightly.

The number of unemployed people in Colorado grew by 2,600 in January. The state’s labor force fell by 2,500 people that same month, putting the labor participation rate at 68.1%, down slightly from 68.3% the month before.

A large trend to watch in 2024 is the divergence of job growth across Colorado’s different industries, said the state’s Senior Economist Ryan Gedney during a media call Monday.

“There’s industries with strong growth and there’s industries with weak or negative growth,” Gedney said.

Of Colorado’s 18 primary industries, 11 saw job growth and seven either saw declines or stayed flat from January 2023.

In 2023, the government sector showed the largest gains with 24,400 jobs added, which includes teachers. Health care added 11,600 jobs and professional and technical services were up by 10,300.

As government job growth dominated in 2023, it could slow this year as money from the American Rescue Plan Act to help the U.S. recover from the pandemic needs to be used up soon, Gedney said.

The largest job decline was seen in the transportation, warehousing, and utilities sector that’s largely fueled by delivery services, which boomed during the pandemic. The industry lost 2,300 jobs in Colorado last year.

“Those employment levels are starting to stabilize, or reduce, as they’re trying to figure out what works best for their businesses,” Gedney added.

The second-largest losses were in Colorado’s retail industry with 2,000 jobs lost over 12 months, the report said. The next largest losses were in the information, finance, manufacturing and construction sectors.

High interest rates and consumers pulling back on spending have hit some of these industries hard, Gedney said. This year it’ll be important to watch whether the Federal Reserve lowers interest rates and how that will spread across the economy.

Pueblo had the highest unemployment rate in January at 5.3%. The lowest was in Boulder and Ft. Collins at 3.4%. Denver’s unemployment rate stood at 3.8% and Colorado Springs was 3.9%.

Monday’s report also released finalized employment figures for 2023, showing unemployment in Colorado was higher in the first nine months of the year than originally thought.

Early figures showed the unemployment rate was 2.8% or 2.9%, but final tallies put it at 3% or above.

It’s a “rosier picture” for the state’s job market as many employers across the nation are still struggling to fill jobs, Gedney said. Colorado ranked 23rd in 2023 for its unemployment rate — a lower ranking than in previous years — but it means the state is more flexible than others in this tight labor market.

“When you have a state that has an unemployment rate around 2%, it certainly puts them in a bind,” Gedney said. “It’s kind of a balancing act.”