Colorado’s unemployment rate surged two full percentage points to 8.4% in December as tighter pandemic restrictions took hold, the U.S. Bureau of Labor Statistics reported Friday.

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The state’s jobless rate was the highest since 10.6% in June and was above the national rate of 6.7%; the state rate had remained unchanged at 6.4% between September and November. The increase resulted from 42,400 people returning to the job market and the number of people holding jobs declining by 24,400, adding more than 67,000 to those looking for work. Most urban counties in Colorado moved to COVID level red in late November, which banned indoor dining and reduced capacity limits for many other businesses. The state relaxed those restrictions this month for most counties.

Colorado unemployment rate unchanged in November

January’s unemployment rate could head even higher, if first-time claims for unemployment benefits are a leading indicator. More than 118,000 payroll and contract workers and self-employed persons filed for benefits between mid-December and mid-January. The unemployment rate is calculated from a survey of households that is conducted monthly on the week that includes the 12th.

The Colorado Department of Labor and Employment received 12,881 initial claims from payroll workers last week, the second consecutive decline from the previous week and the lowest weekly total in two months. Delays in verifying the numbers from the state’s new unemployment benefits system, which didn’t affect payments to claimants, postponed the release of last week’s claims total.

Ryan Gedney, senior economist for the Colorado Department of Labor and Employment, said the job losses resulted from the tighter pandemic restrictions, which were triggered by a surge in COVID-19 cases in October and November. He said job losses could continue in the first quarter, but the state could regain jobs in the second quarter as more residents receive one of the COVID-19 vaccines.

Colorado unemployment rate remains unchanged in October

Unemployment rates jumped in all of Colorado’s metro areas, with Colorado Springs increasing to 8.6% in December from 6% in November and Denver rising to 8.5% from 6.4% during the same period. Boulder had the lowest metro area jobless rate at 6.9%, while Pueblo had the highest at 11.3%. Baca County, in the state’s southeastern corner, had the lowest unemployment rate among counties at 3%, while Pueblo County’s 11.3% rate was the highest county rate.

A separate report that comes from a survey of businesses showed that most of the job losses — more than 36,000 — came in the leisure and hospitality sector, which includes restaurants and hotels. About half of those losses were offset by gains in sectors including the retailing, transportation and utilities industries and business and professional services. The education, health care and construction sectors also added jobs in December, while five other sectors shed nearly 2,000 jobs.