Colorado’s unemployment rate fell for the second month in a row in July, even as the national labor market is seen as softening.

The state’s jobless rate declined to 4.5% last month, down two-tenths of a percentage point from June, the Colorado Department of Labor and Employment reported Friday.

Colorado Springs-based Auria wins $8.1 million contract

While the national unemployment rate increased slightly in July, Colorado’s unemployment rate has surpassed the national rate for nine straight months, since November. The state labor agency reported the national unemployment rate was 4.2% in July, up one-tenth of a percentage point from June.

Bill Craighead, program director of the UCCS Economic Forum at the University of Colorado Colorado Springs, said he was cautiously encouraged by the latest unemployment figures.

“I don’t want to get carried away with excitement based on one good month, but it is nice to see the unemployment rate come down in the state,” he said.

Craighead noted it is “unusual” that Colorado’s unemployment rate has been higher than the national jobless rate for several months. Over the past 30 years, the state rate has been at or below the national rate roughly 85% of the time, he said.

Craighead attributed Colorado’s higher unemployment rate to statewide slowdowns in the tech, construction and real estate industries.

“I think with higher interest rates, some of the interest-sensitive construction and real estate activity (has been impacted). In a growing state, those are kind of more important here than they are in some places that aren’t growing as much,” he said.

Colorado private industry sectors including construction and trade, transportation and utilities saw significant over-the-month job gains in July, the state reported. The construction industry grew by about 3,800 jobs and trade, transportation and utilities by about 2,800 jobs.

“Particularly I’m encouraged … to see there was an increase in construction employment in July,” Craighead said. “It’s a preliminary number and it is just one month, but that’s an area that has been under pressure with higher interest rates. I’ll be watching to see if that uptick persists as we get more reports coming forward.”

The number of people employed in Colorado rose by 4,500 in July to 3,132,200, Colorado’s labor agency reported.

The share of Coloradans participating in the labor force was 67.6% in July, down by one-tenth of a percentage point from June. The U.S. labor force participation rate also edged down one-tenth of a percentage point to 62.2% last month.

Employers in Colorado gained 3,700 nonfarm payroll jobs from June to July for a total of 2,987,100 jobs, the state reported. Payroll jobs in the private sector increased by 2,900, while government added 800 jobs.

Aerospace and defense firm expanding operations in Colorado Springs, to add 500 jobs

The jobless rate and labor force numbers are based on a survey of households; nonfarm payroll jobs estimates are based on a survey of business establishments and government agencies.

“The positive here is you did see more people employed, but then, you also did see a bit of a drop in labor force participation, which is not as positive,” Craighead said.

He added he’s encouraged by how much of Colorado’s job gains came in the private sector last month; market demand and profitability can drive private sector job growth.

“The fact most employment gains came from the private sector is a good sign,” Craighead said.