Colorado’s unemployment rate ticked up slightly in December to 3.4%, but it still remains lower than the U.S. average, according to the Colorado Department of Labor and Employment.

The state’s jobless rate stood at 3.3% in November. The U.S. average remained the same from month to month at 3.7%.

“The rising Colorado rate was due to a decline in total employment, coupled with a decrease in the labor force,” Ryan Gedney, senior economist for the state, said in a call Friday.

The December report shows the number of unemployed people grew by 1,700 to 109,600. At the same time, the labor force declined by 400 last month to 3,249,300.

“Colorado’s unemployment rate has ranged between 2.6% and 3.4% since March of 2022,” Gedney said.

The year-end numbers, including January’s unemployment level, won’t be finalized and released until March 11.

The metro area with the highest unemployment level was Pueblo, with 4.5%. Those with the lowest included Fort Collins and Boulder, at 2.8%, with Denver, Colorado Springs, Grand Junction and Greeley between 3.3%-3.5%, according to the report.

As far as sectors and industries driving the unemployment rate, Gedney said government jobs showed the biggest gains with 2,000 added in December — mostly in education. For the whole year, he estimated the government sector would show gains of 23,000 jobs.

“Over that 12-month period, Colorado’s private sector has only grown 1,100 jobs,” Gedney said. “That essentially translates to a growth rate of 0%.”

The sectors that saw job growth included “professional and technical services,” and “accommodation and food services.” Private sectors with the biggest job losses included “finance and insurance,” “transportation, warehousing, and utilities,” and “administrative and support and waste management.”

The financing and insurance industries are still suffering from the increased interest rates in 2023, Gedney said.

“The private sector has dropped maybe around 8,000 jobs over the past four months,” he said.

“I think transportation, warehousing and utilities accounts for a big chunk of that.”

Those sectors grew substantially during the pandemic, as everyone switched from brick-and-mortar shopping to online/delivery services and those companies are starting to level-set employment.

“We saw these services just skyrocket,” Gedney said. “Some of these businesses are trying to find ways how to … make efficient their processes.

“We’re moving into more of a normal normalized period in terms of demand for these compared to during the pandemic.”