Bureau of Labor Statistics Data May Not Correctly Tell the Story

It is questionable whether the wage and salary data produced by the Bureau of Labor Statistics reflects what is happening on the streets of Colorado. With that in mind, the following paragraphs tell the story of the Colorado economy based on the headlines.

The Headlines

Comments made by Mark Snead

The former director of the Denver Branch of the Kansas City Fed has said that the Tier I energy states are on the verge of recession. To date, the economies in Tier II states have been much stronger and job gains in other industries have more than offset job losses in the energy sector.

On a different note, Snead posted in a blog post saying that” the current expansion is getting to be a bit long in the tooth.” It is 74 months and running.

Government

Governments are optimistic given the following actions:
• Boulder has approved their 2016 budget which includes the addition of 48 employees.
• Governor Hickenlooper has promised $100 million to make Colorado the “best state for biking.”
• The U.S. Treasury CDFI fund has given a $2 million grant to The Colorado Enterprise Fund to support local small businesses.
• The state approved $12.8 million in tax credits for two companies that might result in 1,600 jobs. These companies are in the health care and energy solutions industries.
• Loveland city council will discuss a proposal to provide high-tech manufacturing consulting and training organization EWI with $2 million in funding to open a facility at the Rocky Mountain Center for Innovation and Technology.
• In an uncharacteristic move, the state rejected a proposal for tax credits for a Colorado company that would increase health care employment by 1,418 jobs. The justification was the state did not have the workers to fill the jobs and would have to import them.

Aerospace
Aerospace is one of Colorado’s targeted high tech industries, yet it is in a state of flux with increased involvement from the private sector. The impact of some of the changes remains to be seen.
• Lockheed Martin could lay off 500 IT workers (nationally).
• Aeroject Rocketdyne made an unsolicited bid of $2 billion for United Launch Alliance.
• Jeff Bezos announces Cape Canaveral as the base for his commercial aerospace program.

Retail
The budgets for many cities rely heavily on taxes generated from retail trade sales. Nationally some retail chains are struggling. At the moment that appears to be an issue with the companies, not the industry.
• Best Buy in Broomfield has announced it is closing on October 31.
• A January restructuring caused Macy’s to shutter 14 stores and it recently announced it will close an additional 35 to 40 stores in early 2016. The company runs 770 Macy’s stores and has closed 52 locations over the last five years while opening 12. It is not known if Colorado stores will be closed.

Technology
Colorado has always prided itself for its technology clusters.
• Hewlett-Packard has announced worldwide cuts of 25,000 to 30,000. There is uncertainty whether this will negatively impact Colorado or benefit it if consolidation brings workers to the state.
• Level 3 has announced a round of layoffs associated with the company’s merger with TW Telecomm that took place last fall. The location and number of these workers has not been announced.
• Seagate will layoff 70 workers in Longmont
• Astra Zeneca bought the Boulder Amgen facility and may add 400 jobs.

Construction
Some construction leaders are clamoring that the growth of the industry and the economy may not reach its potential in part because of the lack of trained workers. The lack of a trained workforce has occurred despite solid growth in wages. At the same time, non-seasonally adjusted construction spending is at its highest level since May 2008.

Energy
Synergy Resources paid $78 million to K.P. Kaufman for assets in the Wattenberg Field. After record oil production in May, June production dropped off slightly.

Time will tell whether the Bureau of Labor Statistics or the headlines are correct.

Stock Market Cycles and Elections

James Carville coined the phrase, “It’s the Economy, stupid” to remind voters in the 1992 presidential campaign about the importance of the economy when casting their ballot.

For many years prior to 1992, members of the executive and legislative branches realized they had a better chance of getting re-elected if they influenced fiscal policy (taxes, incentives, wage and job increases, etc.) to create the perception their leadership was responsible for a healthy economy.

As a result of their manipulation, four-year stock market cycles evolved. The cycle assumes companies, and thus investments, have a stronger performance in the second half of a president’s term and a weaker performance in the first half.

This short analysis looks at the performance of the Standard & Poor’s 500 Index (S&P 500) for the presidential terms from 1952 to 2016. Obviously the period 2013 to 2016 is still in progress; however, a case can be made that the current bull market will not follow the above mentioned trends.

Fifteen stock market cycles were evaluated. The average time from peak to peak was 1,534 days or 4.2 years and the average time from trough to trough was 1,509 days or 4.1 years.

The two tables that follow look at the peaks and troughs and the year they occurred for each of the presidential terms.

The first table looks at the peaks.
• Year 1 – 3 peaks.
• Year 2 – 3 peaks.
• Year 3 – 2 peaks.
• Year 4 – 7 peaks.
Sixty percent of the peaks occurred during the second half of the presidential term.

Presidential Term Date S&P Change Up Annualized % Change Up # of Days Up Year Up
1953-1956 9/14/1953 22.71
8/3/1956 49.64 26.93 31.10% 1,054 Year 4
1957-1960 10/22/1957 38.98
1961-1964 12/12/1961 72.64 33.66 16.20% 1,512 Year 1
6/26/1962 52.32
1965-1968 2/9/1966 94.06 41.74 17.60% 1,324 Year 1
10/7/1966 73.2
11/29/1968 108.37 35.17 20.00% 784 Year 4
1969-1972 5/26/1970 69.29
1973-1976 1/11/1973 120.24 50.95 23.30% 961 Year 2
10/3/1974 62.28
9/21/1976 107.83 45.55 32.10% 719 Year 4
1977-1980 3/6/1978 86.9
11/28/1980 140.52 53.62 19.20% 998 Year 4
1981-1984 8/12/1982 102.42
1985-1988 8/25/1987 336.77 234.35 26.60% 1,839 Year 3
12/4/1987 223.92
1989-1992 7/16/1990 368.95 145.03 21.00% 955 Year 1
10/11/1990 295.46
1993-1996 2/2/1994 482 186.54 15.90% 1,210 Year 2
4/4/1994 438.92
1997-2000 7/17/1998 1,186.75 747.83 26.10% 1,565 Year 4
8/31/1998 957.28
3/24/2000 1,527.45 570.17 34.80% 571 Year 4
2001-2004 10/9/2002 776.76
2005-2008 5/19/2008 1,426.63 649.87 11.40% 2,049 Year 4
2009-2012 3/9/2009 676.53
11/3/2010 1,363.61 687.08 52.70% 604 Year 2
8/2/2011 1,099.23
2013-2016 5/21/2015 2,130.82 1,031.59 19.00% 1,388 Year 3

The second table looks at the troughs..
• Year 1 – 3 troughs.
• Year 2 – 10 troughs.
• Year 3 – 2 troughs.
• Year 4 – 0 troughs.
About 87% of the troughs occurred during the first half of the presidential term. This suggests that fiscal policy in the third or fourth year of a presidential term may have prevented or postponed economic weakness for that year, but it mostly likely have kicked the can forward to the first half of the subsequent presidential term. In some cases pushing the weakness forward had a detrimental impact on the economy.

Presidential Term Date S&P Change Down Annualized % Change Up # of Days Down Year Down
1953-1956 9/14/1953 22.71 Year 1
8/3/1956 49.64
1957-1960 10/22/1957 38.98 -10.66 -18.00% 445 Year 1
1961-1964 12/12/1961 72.64
6/26/1962 52.32 -20.32 -45.70% 196 Year 2
1965-1968 2/9/1966 94.06
10/7/1966 73.2 -20.86 -31.70% 240 Year 2
11/29/1968 108.37
1969-1972 5/26/1970 69.29 -39.08 -26.00% 543 Year 2
1973-1976 1/11/1973 120.24
10/3/1974 62.28 -57.96 -31.70% 630 Year 2
9/21/1976 107.83
1977-1980 3/6/1978 86.9 -20.93 -13.80% 531 Year 2
11/28/1980 140.52
1981-1984 8/12/1982 102.42 -38.1 -16.90% 622 Year 2
1985-1988 8/25/1987 336.77
12/4/1987 223.92 -112.85 -77.10% 101 Year 3
1989-1992 7/16/1990 368.95
10/11/1990 295.46 -73.49 -60.60% 87 Year 2
1993-1996 2/2/1994 482
4/4/1994 438.92 -43.08 -42.90% 61 Year 2
1997-2000 7/17/1998 1,186.75
8/31/1998 957.28 -229.47 -82.50% 45 Year 2
3/24/2000 1,527.45
2001-2004 10/9/2002 776.76 -750.69 -23.30% 929 Year 2
2005-2008 5/19/2008 1,426.63
2009-2012 3/9/2009 676.53 -750.1 -60.40% 294 Year 1
11/3/2010 1,363.61
8/2/2011 1,099.23 -264.38 -25.10% 272 Year 3
2013-2016 5/21/2015 2,130.82

The following three charts show the daily performance of the S&P 500 for 1953 to 1976, 1973 to 1996, and 1993 to 2016.

The average number of days for periods of growth were longer than the downturns, 1,169 days compared to 357 days. The moral of the story is that growth occurs steadily over time, but losses are usually quick and painful.

stock market cycles and elections

In addition, the average increase in the S&P 500 was 300 points during positive cycles, compared to 173 points for the down cycles.

stock market cycles and elections

The most severe absolute decline in the S&P 500 ended on March 9, 2009 when the index closed at 676.53. Over the previous 294 days the index plummeted 750.10 points, an annualized change of -60.4%.

The current bull market will most likely be the strongest for the period 1952-2016. The bull market that started on March 9, 2009 was also notable. It ended on November 3, 2010 when the S&P 500 closed at 1,363.61. Over 604 days the index recaptured 687.08 points that it had lost, an annualized gain of 52.7%.

stock market cycles and elections

U.S. Job Growth Remains Strong

On August 7th, the Bureau of Labor Statistics released its monthly update for U.S. nonfarm payroll employment. The number of jobs increased by 215,000 in July and U.S. job growth falls in the solid-to-strong category.

The areas with the largest increases were retail trade, health care, professional and technical services, and financial activities.

Average U.S. employment for the first seven months of 2015 is 3.1 million greater than the same period in 2014. That is about 256,000 net new jobs per month.

If job gains continue at the current pace, average annual wage and salary employment for 2015 will be about 142 million. As a point of reference, the 2015 population will be about 322 million.

Throughout 2015, U.S. employment has continued to post steady gains (month-over-month prior year) although there has been a slight downward trend since the change in employment peaked in February.

This downward trend is thought to be normal volatility and not a cause for concern. Even with the decrease, the number of jobs added this year will be well above the 2014 total.

All eyes are on the Fed and how they will interpret the latest news from BLS. They would like to see strong job and wage growth before they start raising interest rates; however it is most essential for them to see sustained, solid U.S. job growth. Unfortunately, for workers wage growth is less critical.

The consensus among most economists is that gradual rate hikes will begin in September.

The bottom line – the Fed will raise interest rates and U.S. employment will increase by 3.1 million this year. At this point, both are positive signs for the U.S. economy.

U.S. Job Growth

 

Economic Risks at the National Level That Might Affect Colorado

The U.S. economy is currently stronger than it was in 2014. The good news is the Colorado is outperforming the U.S. in three key areas:
• The Colorado rate of population growth in 2015 is projected to be 1.6% vs. 0.7% for the U.S.
• The Colorado rate of job growth in 2015 is currently projected to be 3.0% vs. 2.2% for the U.S.
• The recently released GDP data shows that Colorado outperformed the U.S. in the rate of growth, 4.7% vs. 2.2% in 2014.

Currently, the strengths of the national economy outnumber the economic risks. With that in mind this post reviews the manner in which the risks might impact the Colorado economy. For each risk the impact on Colorado is highlighted in italics.

The Economic Risks

The Fed – Janet Yellen indicated there are still issues with the labor market. These concerns include finding trained workers and weak wage growth.

Colorado’s low unemployment rate has caused companies to have difficulty finding trained workers in such industries as construction and the high tech sector. Areas of strong wage growth have occurred in occupations where there is high demand for workers.

Real GDP – The rate of growth in business investments is lackluster. Increased demand for goods and services will drive companies to invest in new equipment, software and buildings.

The decrease in the price of oil has caused Colorado companies in the Oil and Gas industry to curtail investments in their business.

The Dollar – The strong dollar has made U.S. goods/exports less competitive in foreign markets.

The strong dollar is one of many factors that could challenge Colorado exporters in 2015.economic risks

Industry Sentiment – Manufacturing may remain sluggish through the end of the year.

The growth of Colorado manufacturing output was disappointing in 2014. That is unlikely to change in 2015.

Housing – In some parts of the country the rate of housing price appreciation may be problematic.

It will be more difficult to find attainable and affordable housing as a result of the sharp increases in housing prices. These rising prices will cause the state’s rate of inflation to increase.

Price of Oil – Low oil prices have benefited consumers (lower prices at the pump) and some industries, but they have hurt the extractive industries.

Through the first half of the year, consumers have saved about $480 with lower gasoline prices. Currently, it is not possible to measure the impact of cheaper oil on the Oil and Gas industry.

International Situations – The current global situational and foreign policy challenges to the U.S. economy currently include Iran, Syria, China, Russia, Greece, Israel, Cuba, the EU, and Ukraine.

At the moment Colorado shares a level of risk similar to the U.S. as a result of situational and foreign policy challenges.

The strengths of the national economy have created momentum that will further strengthen the U.S. and Colorado moving into 2016; however, if several of these economic risks materialize at the same time, then the health of the U.S. and Colorado economies might be jeopardized.

Colorado Economy On Track to Add At Least 68,600 Jobs in 2015

At the midpoint of the year the U.S. economy is on solid footing and the second half of the year will be much stronger than the first half. The Colorado economy continues to outperform the U.S. in its rate of growth for population, employment, and GDP.

Key Data Points for the U.S.
Real GDP – Q2 will be stronger. Annual growth will be 2.5% to 2.9% in 2015.
Retail Sales – Up 1.3% for 6 months, projected to be up 3.0% for 2015.
U.S. Employment – The U.S. is on track to add 3.1 million jobs this year.
Unemployment Rate – 5.3%, down from 6.1% a year ago, 8.3 million unemployed, trending down.
ISM Indices –Manufacturing is sluggish and expected to remain that way; Non-Manufacturing is steady and well above 50.
Price of a Barrel of Oil (WTI) – Since mid-March it has varied from $43 to $61. Currently in the low 50s, but trending down.
Construction – For 6 months, employment up 4.2%, weekly earnings up 3.0%.
Case Shiller Housing Prices – U.S. prices up 4.2% from a year ago.
Dow Jones Industrial Average – On July 17rd the DJIA was 18,086, up 1.5% from 17,823 at the end of the year.

Average Colorado employment is 68,600 greater than the same period last year, with the potential of being revised upward at a later date.

Colorado Economy

As has been the case in the past, the sectors with the top job growth are: Health Care; Accommodations and Food Services (part of the Tourism Industry); Construction; Professional, Scientific, and Technical Services; and Manufacturing. These sectors accounted for about 72% of total job growth in the first half of 2015.

The Bureau of Economic Analysis has released the 2014 Gross Domestic Product for Colorado. The state’s Real GDP expanded at a rate of 4.7% compared to 2.2% for the U.S.

Key Data Points for Colorado
QCEW Revisions – Recent revisions to Q4 2014 could cause 2014 employment to be revised upward in the March 2016 benchmark revisions. There was stronger momentum coming into 2015 than originally anticipated.
Population – Colorado’s population will increase by 88,800 people this year.
Unemployment Rate – 4.4%, down from 5.0% a year ago.
MSA Unemployment Rate – Boulder and Ft. Collins have the lowest rates at 3.5% and 3.6% respectively.
2014 Colorado GDP – The state Real GDP grew by 4.7% in 2014 compared to 2.2% for the U.S.
2014 Contribution to GDP Growth – The Mining sector accounted for 6.2% of GDP and 18.2% of GDP growth in 2014.
Wage and Salary Employment – On average Colorado has added 68,600 jobs this year based on current data. This is not adjusted for the projected revisions.
Leading Sectors for Growth – About 72.2% of the jobs have been added in the Health Care; Construction; Accommodations and Food Services; Professional, Scientific, and Technical Services; and Manufacturing.

For details or more information about the Colorado economy, check out the 2015 cber.co forecast and economic updates on this website, https://cber.co.

Debt – Good or Bad?

Depending on your perspective…
• Debt is good if it is used to make purchases that stimulate consumption and economic growth.
• Debt can deter growth if debt service obligations prevent consumption and economic growth.

Whether or not you believe debt is good for the economy, one thing is for sure. Debt has increased!

Federal Debt
• 1966 to 2000 (34 years), $.3 trillion to $5.8 trillion; the level of debt increased by$5.3 trillion.
• 2000 to 2008 (8 years) $5.8 trillion to $9.4 trillion; the level of debt increased by $3.6 trillion.
• 2008 to July 2014 (68 months) $9.4 to $17.8 trillion; the level of debt increased by $8.4 trillion.

Public Debt has exceeded GDP since Q4 2012. The only other time that debt as a percent of GDP has been greater was during the 1940s.

Consumer Credit Outstanding
• In January 2006 Consumer Credit Outstanding was $2.37 trillion.
• In October 2014 Consumer Credit Outstanding was $3.28 trillion.

Student Loans
• In Q1 2006 Student Loans Outstanding were $500 billion.
• In Q3 2014 Student Loans Outstanding were $1.3 trillion.

Is this level of debt stimulating or preventing growth in the U.S. economy?

debt

 

When Can We Expect the Next Recession?

The National Bureau of Economic Research (NBER) officially tracks the performance of the U.S. economy for the purpose of identifying the timing of the troughs and peaks, which determine when recessions occur.  Specifically, NBER identifies:
• The length of the contraction, peak to trough.
• The length of the expansion, trough to peak.
• The length of the cycle, peak to peak.
• The length of the cycle, trough to trough.

They don’t predict when the next recession will occur. Instead, they will announce when the most recent recession has started and ended after-the-fact.

The following table shows NBER data since the end of World War II.

1-Peak 2- Trough 3-Contraction- Peak to Trough 4-Expansion- Trough to Peak 5-Cycle- Peak to Peak 6-Cycle-Trough to Trough
November 1948(IV) October 1949 (IV) 11 37 48 45
July 1953(II) May 1954 (II) 10 45 55 56
August 1957(III) April 1958 (II) 8 39 47 49
April 1960(II) February 1961 (I) 10 24 34 32
December 1969(IV) November 1970 (IV) 11 106 117 116
November 1973(IV) March 1975 (I) 16 36 52 47
January 1980(I) July 1980 (III) 6 58 64 74
July 1981(III) November 1982 (IV) 16 12 28 18
July 1990(III) March 1991(I) 8 92 100 108
March 2001(I) November 2001 (IV) 8 120 128 128
December 2007 (IV) June 2009 (II) 18 73 91 81

Note: Column 5 is the sum of column 3 and column 4 of the same line. Column 6 is the sum of column 3 of the previous line and column 4 of the same line.

In addition, the contraction and expansion data is shown in the following chart.

The next recession

So, when is the next recession?

Recessions are not determined by mathematical equations or charts, rather they are determined by economic conditions that cause the business cycle to move up and down. Since the end of World War II, the length of the shortest business cycle is 18 months (peak from previous peak) and the length of the longest business cycle is 128 months.

Today the U.S. is somewhere in between the shortest and the longest time frame for a business cycle.

The most recent peak was in December 2007. Seven years, or 84 months have passed since the last peak.

The most recent trough was June 2009. Six and a half years, or 66 months have passed since the last trough.

If the length of current and future business cycles is similar to the length of past business cycles, then it is likely the U.S. will see the next recession before the end of Governor Hickenlooper’s term in office.

While it is possible for the next recession to occur prior to the 2016 election, both parties are incented to take every possible step to prevent that from happening.

When is the next recession? Stay tuned!

 

 

 

U.S. and Colorado Unemployment Rates Continue to Decline

Nationally, the unemployment rate has dropped below 6.0%, to 5.9% and the number of unemployed is now below 9.3 million. While this decline is a positive sign, the number of unemployed remains about 2.5 million above the low point in the second half of 2006.

The BLS tracks the unemployment rate in 22 occupations. Ten of those occupations have unemployment rates below the natural rate of unemployment (5.0%).

Most likely there is upward pressure on wages in these occupations at a national level, as well as in Colorado.

Occupation Unemployment Rate
Legal occupations 2.2%
Management occupations 2.3%
Architecture and engineering occupations 2.4%
Healthcare practitioner and technical occupations 2.4%
Business and financial operations occupations 2.7%
Computer and mathematical occupations 2.8%
Life, physical, and social science occupations 2.8%
Community and social service occupations 3.3%
Education, training, and library occupations, 3.3%
Installation, maintenance, and repair occupations 3.4%
Healthcare support occupations 4.9%

Of the above occupations, the ones most critical to Colorado are:
• Architecture and engineering occupations
• Healthcare practitioner and technical occupations
• Computer and mathematical occupations
• Healthcare support occupations

Although the U.S. unemployment rate is approaching the natural rate of unemployment (5.0%), there is limited upward pressure on wages across the nation. This is reflected in the National Association of Business Economists October Survey, which indicated that in Q3 2014, 24% of the respondent firms raised their wages and salaries, about half the percentage that raised their wages in Q2. If there was a potential for upwards wage pressures earlier in the year, those pressures have eased significantly.

The Colorado unemployment rate, 4.7%, and the number of unemployed, 131,348, continues to decline.

Even though the unemployment rate is near the natural rate of unemployment there appears to be minimal upward pressure on wages, except in a few categories of occupations such as specialized high -tech jobs, computer related occupations, and healthcare. In addition, wage pressures may be felt in geographic areas, such as Weld County, where the extractive industries are booming.

In 2009 the average annual wages for all occupations in Colorado, as measure by the QCEW data, was $46,861. By 2013, average annual wages had increased to $50,873, an annualized rate of growth of 2.1%.

Unfortunately, during that same period, the Consumer Price Index for the Denver-Boulder-Greeley area increased at an annualized rate of 2.6%. In other words pay increases did not keep up with increases in the cost of living. This year inflation is projected to increase at a higher rate than the gain in total wages.

On average, Colorado employment is 65,200 greater for the first 9 months of 2014 than the same period in 2013. That total will likely be revised upwards when the BLS benchmarks the CES data series in March 2015.

Looking ahead for the remainder of the year, the tourism; construction; health care; and professional, scientific, and technical services sectors will continue to be the primary sources of growth. Although, the extractive industries are small they are the source of greater indirect job growth and significant output growth.

BLS August Jobs Numbers Revised Upward

Last month the Bureau of Labor Statistics delivered a Labor Day surprise when its monthly employment situation press release stated the U.S. had only added 142,000 jobs in August. This month the BLS reversed their bombshell announcement; they revised the August jobs numbers from +142,000 to +180,000 and July was revised from +212,000 to +243,000. In other words, their previous estimates for these two months missed their mark by 69,000.

Total nonfarm payroll employment increased by 248,000 in September. For the month job growth was led by professional and business services, retail trade, and health care.

These increases in wage and salary employment were accompanied by a decline in unemployment to 5.9%. The number of unemployed persons decreased to 9.3 million (That is still a lot of people). Compared to a year ago, the unemployment rate and the number of unemployed persons were down by 1.3 percentage points and 1.9 million, respectively.

In addition, the number of long-term unemployed (LTE) was remained at 3,000,000 people. The LTE are those jobless for 27 weeks or more and they account for 31.9% of the unemployed.

The outlook remains positive for the U.S. and Colorado through the end of the year.

August Jobs numbers

U.S. and Colorado Economy Remain Solid

National Economy
The U.S. economy remains strong, with solid employment and output growth.

• Nationally, employment remains strong, despite slower than expected job growth in August. The non-seasonally adjusted data shows that an average of 215,000 jobs has been added each month through eight months. This means the U.S. will add about 2.5 million jobs this year.
• Output remains solid. The first Q2 estimate showed real GDP growth of 4.0%. That was revised upwards to 4.2%. It is possible the third estimate, due later this month, could be revised even higher to 5.0%.
• At the most recent FOMC meeting the Federal Reserve provided no surprises. Their stance on the economy indicates:
o The rate of inflation remains below target.
o Quantitative easing will come to an end.
o There is slack in the labor market.
o Interest rates will remain low in the near term; however, once rate increases begin they will accelerate faster than previously anticipated. It is likely rates will begin increasing in mid-2015.
• The outlook for construction is positive.  Single family building permits have been flat; however the NAHB index shows that homebuilder sentiment is much stronger than the permits data. This suggests greater activity, and stronger data, will occur in the future.
• The unemployment rate, number of unemployed, and the number of Americans filing new claims for unemployment benefits continue on a downward trend. The economy should remain healthy as long as fewer people are unemployed and an increasing number of Americans are working.

Colorado Economy

The performance of the Colorado economy is closely tied to changes in U.S. job and output growth. Since the end of the recession Colorado job growth has outperformed the U.S. because of its mix of industries. The state is on track to add jobs at an accelerated rate for the fourth consecutive year.  Job growth this year will be about 3.0%.

• The extractive industries have been a major direct and indirect contributor to the job growth. As well, the extractive industries were responsible for about one-third of the state’s GDP growth in 2013. The extractive industries are important to the economies of about half the counties in the state. From a jobs perspective, the sector is small, but the number of workers will increase by at least 9% this year compared to 2013.
• So far this year, between 10% and 12% of the jobs added in Colorado are construction jobs. The number of jobs will increase by at least 6.5% compared to the same period last year. Growth in the sector might be constrained by a lack of trained workers in specialized construction occupations such as plumbers, HVAC workers, and electricians. The home and infrastructure subsectors also include distinct specialized occupations.
• Tourism has enjoyed a banner year in Colorado. It began with good snow and a strong ski season. The good snow season also meant plenty of water for mountain rafting and summer tourism activities. Special events, such as the USA Pro Challenge, and the lack of fires and flooding provided the foundation for a strong summer season. Leisure and hospitality job growth is poised to be at least 4.6% greater in 2014 than last year. The sector will be responsible for adding about 19% of the jobs in the state this year.  The sector plays a significant part of the economy in all 64 counties.
• The healthcare sector will add more than 10,000 workers in 2014 and expand at a rate of more than 4.3%. The sector continues to face challenges finding workers in many occupations and in rural areas.
• The growth of the professional, scientific, and technical sector is important to the state because a portion of these companies are directly or indirectly a part of the state’s advanced technology sector. The lifestyle of Downtown Denver and Colorado is attracting millennials to jobs in these sectors. The growth of in the sector will be at a rate of about 4.5% in 2014. It is important to note that many of these occupations pay higher than average wages and the sector is adding jobs at an increasing rate.