U.S. Bureau of Labor Statistics cutting Colorado off from monthly job reports because of continued data problems

Colorado’s employment outlook is about to go dark.

Starting in March, the U.S. Bureau of Labor Statistics, the federal agency that collects and publishes economic data, is suspending monthly employment reports for Colorado.

The development is due to problems with data collection that have plagued Colorado’s labor department since a new unemployment insurance computer system was introduced more than a year ago. The troubled rollout has led to incomplete information being collected on how many jobs are being created, making it difficult to get a true picture of Colorado’s job market.

“Without accurate Colorado employment levels, BLS will be unable to complete the 2024 benchmark process or to produce accurate monthly estimates for Colorado,” the BLS said in a notice on its website.

Erratic data flagged in 2023

The BLS first flagged “unusual movements” with Colorado’s employment data in March. The problems cropped up in a report called the Quarterly Census of Wages and Employment, or QCEW. The QCEW information comes from unemployment insurance reports that companies across the U.S. are legally required to submit. It’s considered the gold standard for calculating job growth because other employment surveys are voluntary.

The QCEW is refined throughout the year and underpins a huge swathe of economic modeling and forecasting.  For instance, the U.S. Department of Commerce uses it to calculate personal income, while the Social Security Administration uses the data as a quality check against information submitted by the Internal Revenue Service. It’s a critical component to understanding how the economy is working, for individual states as well as for the federal government. 

But, according to the BLS, Colorado’s data has become so unreliable it’s unusable.

“We do not plan to release employment, hours, or earnings data for Colorado until the issue is resolved,” a spokesperson for the BLS said in an emailed statement. “Pending resolution of these data quality concerns, BLS will resume publication of employment, unemployment, and wage data for Colorado as soon as practicable. However, we do not currently have a timeline.”

State department "disappointed"

Colorado has made “significant progress in data cleanup,” the state’s labor department said in its most recent jobs update this month.

“We were disappointed to learn of BLS’s decision to suppress our data even though we have been working closely with them on the issue,” a spokesperson for the department said in an emailed statement. “When we submitted our Q2 2024 QCEW file in October, we were told that our data had improved and that our reported employment and wages were within range. Since then we have made further improvements … including adjustments to the number of establishments in the dataset to reflect inactive accounts and further cleanup of our statistics with respect to employment and wages.” 

The botched software update has been a pain for some businesses. A Colorado payroll company that serves small businesses reported hundreds of its clients were being overcharged on unemployment insurance taxes because of the new computer system.