Tag: Colorado employment

BLS Benchmark Revisions Push 2014 Colorado Employment Higher

horvath Leave a comment

The Bureau of Labor Statistics released their benchmark revisions for 2014 Colorado employment in March. The upward revisions were significant and showed that Colorado added 78,900 wage and salary jobs. The final revisions for 2013 were minimal.

The data provided no surprise for those who gauge economic growth by the activity on the streets. The magnitude of the upward revision was disappointing for those who rely heavily on accurate jobs data to make critical business decisions.

In fairness to BLS, it is a challenge to report employment data in periods of strong growth and decline. As has been the case with many public and private organizations, BLS has been expected to provide more accurate estimates in shorter time frame at a lower cost. That is not always an equation for high accuracy.

The “preliminary” data showed that Colorado employment was increasing at a decreasing rate in the second half of 2014. The “benchmark” data shows there was actually strong growth. In addition, their estimate methodologies caused noticeable errors in key industries. In other words, industries that were thought to be having a really strong impact on the growth of the state were only having a strong impact on it.

It is important to understand the significance of the difference between the preliminary and the benchmark data.

Most economic forecasts for 2015 were based on the preliminary 2014 data – the data with the errors. Most likely these forecasts will not accurately account for the actual magnitude of job growth in 2014 which may cause errors in their estimation of growth in 2015.

Use caution when reviewing any Colorado jobs forecasts for 2015. Most are likely to contain biases resulting incorrect assumptions derived from the 2014 data.

The good news is the state added jobs at a faster rate than anticipated. Most likely Colorado will enjoy a similar rate of growth in 2015.

benchmark vs preliminary data

Colorado Employment to Continue at Steady Pace in 2015

horvath Leave a comment

Later this week, cber.co will release its Colorado economic forecast for 2015. The primary focus of the Colorado forecast is employment within the state. As economic developers say, “it all starts with a job.”

Each year the forecast provides an optimistic, pessimistic, and most likely scenario.

The 2015 optimistic scenario calls for:
• U.S. Real GDP growth will be greater than 2.9%.
• Colorado will add more than 76,000 workers.

The projected likelihood of this scenario is 15%. The Colorado economy has experienced solid job growth since 2012; however, there is nothing to believe that it will experience growth at a significantly greater rate during 2015.

The pessimistic scenario calls for:
• U.S. Real GDP growth will be less than 2.5%.
• Less that 70,000 Colorado workers.

Unfortunately, there is more downside risk to the forecast than upside risk. The projected likelihood of this scenario is 30%. While the global and U.S. economies are expected to see slight growth in output, the Colorado economy could be derailed if the price of oil remains below $65 per barrel (the estimated breakeven point for the Niobrara Oil field) for an extended period.

The most likely scenario calls for:
• U.S. Real GDP will be 2.5% to 2.9%.
• The U.S. will add at least 2.6 million workers.
• Colorado will add 3.0% of total U.S. jobs added.
• Colorado will add 70,000 to 76,000 workers, job growth will be 2.8% to 3.0%.

Despite downside risks associated with lower prices for oil and reduction production in Colorado there is a 55% likelihood this forecast will occur. Since 2012 growth has been steady and broad-based. Much of the growth has been in sectors such as tourism, which have an indirect link to the extractive industries.

Average Colorado employment will be 2,525,600 for 2015.

For additional information about the 2015 cber.co Colorado Economic Forecast click here.

Colorado Lost 700 Jobs – Don’t Believe It

horvath Leave a comment

Earlier this morning, the Colorado Department of Labor and Employment issued a press release stating that Colorado lost 700 jobs in August compared to the previous month. The data series was adjusted.

The data does not reflect what is happening on the street. It fails to echo the confidence that consumers have in the national and state economy.

• The ISM indices for manufacturing and the services sector are positive.
• While some of the construction data is flat or down, NAHB data is up, suggesting better data in the months ahead.
• On 9/26, the Q2 GDP will be revised. The third estimate is expected to be revised upwards to 4.8ish.

Locally, there is even stronger reason to be optimistic.

• The state made it through the summer without any major fires, floods, or other natural disasters (knock on wood).
• The number of business establishments continues to increase. The leaders in relative growth are Broomfield, Denver, Douglas, and Boulder.
• Universities and K-12 are better funded than a year ago.
• Retail sales tax collections up, as evidenced by increased budgets for the state and many municipalities.
• The State General Fund has collected more revenue, a reflection of improved business and personal income taxes.
• The Colorado Tourism Office has reported a record level of tourism visitation and spending for the summer months.
• Developers are optimistic – believably optimistic.

From a methodological perspective, there are multiple reasons why the data will likely be revised upwards next month and later in March 2015. While it is possible the data turned down slightly in August, it is difficult to believe there were seasonally adjusted job losses in August.

Colorado Loses 700 Jobs

 

cber.co Colorado Economic Forecast for 2014 – 68,000 to 74,000 Jobs to be Added

horvath Leave a comment

In 2013 the state experienced natural disasters and self-inflicted political wounds, yet Colorado employment grew at a faster than expected rate. The cber.co economic forecast points to continued expansion  for 2014.

On a Positive Note…

  • The state population grew at a higher rate than expected in 2013. Stronger growth is on tap for 2014.
  • The story is the same for employment. In 2013, the state added approximately 68,000 workers and will add another 68,000 to 74,000 in 2014. This represents job growth in the rage of 2.9% to 3.1%.
  • Unemployment will continue to decline, and will be in the range of 5.5% to 5.8% at the end of 2014.
  • In 2013 consumers were delighted that gasoline prices declined. At the moment there is no reason to believe they will rise precipitously (knock on wood).
  • Colorado new car registrations have risen steadily for the period 2010 to 2013. A decline is unlikely in 2014.
  • Colorado’s general fund, particularly sales and income taxes, has been a benefactor of increased population, employment, and wages. Likewise the revenue for city and county governments has improved.

Some Mixed News…

  • Per Capita Personal Income will increase by 3.7% in 2014.  This is slightly less than the rate of growth for the U.S. Over the past two decades the gap between the U.S. PCPI and the state PCPI has closed significantly.
  • In 2014, Colorado inflation will be 3.0%, well above the rate for the U.S.
  • In Colorado, housing prices have increased at a faster rate than the nation. That is great news for home owners, but not so good news for people wanting to enter the housing market.
  • The Construction Sector is slowly improving.  Increased building activity supports growth in multiple sectors and causes greater congestion on the highways. For some, the latter is not desirable.
  • Although the state returned to 2008 peak employment, it will be a long time before the state returns to the 2007 peak number of establishments.

Looking ahead, the economy will build on the foundation established in 2013. Hopefully the state’s leadership will be less dysfunctional.

Click here to review the cber.co forecast and other economic reports.

cber.co forecast

©Copyright 2011 by CBER.

Jobs and Output Data Point to Stronger Growth for Colorado

horvath Leave a comment

Earlier today, the Bureau of Labor Statistics released November jobs data for Colorado. As measured by increased jobs and decreased unemployment, the update showed the improvement in the economy is geographically broad-based. Most states are enjoying the recovery!

Specifically the highlights from the jobs data are:

  • Wage and salary employment increased in 43 states and decreased in 7 states and the District of Columbia.
  • Decreased unemployment rates were recorded in 42 states and the District of Columbia compared to a year ago, 1 state was flat and 7 states were higher. Nationally, November unemployment registered 7.0%, down 0.8 percentage points from a year ago.
  • In Colorado the November unemployment rate was down 1.1 percentage points from the same time last year (7.6% compared to 6.5%).

A stronger national economy bodes well for Colorado.

Earlier in the month the Bureau of Labor Statistics indicated its projection models had understated the rate of job growth in the state in 2013. Latest estimates project the state will actually add 60,000 to 65,000 jobs this year.

More good news came today when the Bureau of Economic Analysis revised Q3 GDP upward to 4.1%. Exports and business and consumer spending were stronger than anticipated.

The stronger jobs and output data suggest the impacts of sequestration, the partial government shutdown, and the fallout from the earlier budget and debt ceiling debates may have had less of a net impact than originally thought.

For the first time in 6 or 7 years, Colorado and the U.S. will be entering a new year with a solid foundation for growth. If that foundation remains in place, there is reason to believe that Colorado will add at least 65,000 jobs in 2014.

©Copyright 2011 by CBER.

Leeds Economic Forecast Points to Slower Growth in Year Ahead – AGAIN

horvath Leave a comment

On December 8th Professor Richard Wobbekind and the Leeds School of Business (SOB) released the 49th annual economic forecast for Colorado. Unfortunately, the fundamentals of the 2014 outlook were as questionable as the 2012 and 2013 forecasts.

For three consecutive years (2012 to 2014) the SOB has projected fewer jobs would be added in the coming year, even though Real GDP was predicted to increase significantly in two of those three years.

A summary of the SOB forecasts from 2012 to 2014 are provided in the table below.

 

Leeds School of Business Forecast – US Real GDP and Colorado Employment

Year

Change in Real GDP

Change in State Employment

 

2012

In 2012 Real GDP will show a significant increase in the rate of growth for 2011

Fewer jobs will be added in the coming year

 

2013

In 2013 Real GDP will growth at about the same rate as 2012, a slight decrease is possible

Fewer jobs will be added in the coming year

 

2014

In 2014 Real GDP will increase at a rate almost double the 2013 rate

Fewer jobs will be added in the coming year

 

Source:  SOB BEOF publications

 

The actual data for 2012 and preliminary data for 2013 are provided in the table below.

 

Performance of the Economy – US Real GDP and Colorado Employment

Year

Change in Real GDP

Change in State Employment

 

2012

The rate of growth of 2012 was significantly greater than the rate of growth for 2011

More jobs were added in 2012 than 2011

 

2013

The 2013 preliminary rate of growth was significantly lower than the rate of growth for 2012.

More jobs were added in 2013 than 2012

 

2014

To be determined

To be determined

 

Source: BLS, BEA, CBER

 

A historical look at the recoveries from the last three recessions is instructive.

After the 1991 recession, Colorado added jobs at an increasing rate for three years (1992 to 1994). This recovery was exceptionally strong. Job growth in 1994 was second highest in state history.

  •  Following the 2001 recession, Colorado “added” jobs at an increasing rate for four years (2003 to 2006). That rate of recovery for that period was anemic, but improving. Continued job growth at an increasing rate was cut short by the 2007 recession.
  •  After the 2007 recession, Colorado has “added” jobs at an increasing rate for four years (2010 to current). The rate of recovery has been so-so. In other words, there is a strong likelihood that job growth will continue at an increasing rate in 2014.

The saying “Every blind squirrel finds an acorn now and then” can be applied to the 2012-2014 SOB forecasts. If they continue to predict the state will add fewer jobs next year than this year, at some point they will be correct. Will 2014 finally be the year they are right?

We can only hope the SOB is wrong again!

 

©Copyright 2011 by CBER.

Colorado Jobs Data for October – Mixed Message

horvath Leave a comment

The recent BLS jobs report for Colorado had mixed news.

The good news is that Colorado will see solid job growth this year. The bad news is that jobs are being added at a slower rate than earlier in the year.

On the street, most Colorado business owners are not pleased with government leadership, but they are generally upbeat about the economy.

The unemployment rate was flat from February through August. The slight declines in September and October are a sign that the rate continues to slowly move downward. BLS reports the state rate is lower than the rate for the U.S.; however, it is not statistically different than the U.S. (The latest state rate is 6.8% compared to 7.3% for the U.S.)

On a positive note, the number of unemployed workers has fallen to 185,500. This is the lowest number of unemployed since February 2009; however, it is more than twice the pre-recession number.

The wage and salary data is mostly positive. The average number of jobs added for the first 10 months of 2013 is about 56,400 greater than the same period last year. Unfortunately, jobs have been added at a declining rate since March.

Colorado is on track to add about 55,000 jobs for 2013, an increase of 2.3%. The question is, “Given this downward trend in the number of jobs being added, what lies ahead for 2014?”

All jobs are important; however, there is concern there are too few jobs being added that “create” other jobs or bring in wealth from the outside. The lack of a sufficient number of new primary jobs may be the reason for the decreasing rate of growth. State and local economic developers are working hard to address this issue.

It is unlikely the state numbers were noticeably impacted by the September flooding and the limited Government shutdown. The flooding clearly had a negative impact on the local economies and the limited government shutdown may have caused inconvenience for cities and companies that are heavily dependent on federal funding. These events will likely have a greater impact on overall output than employment.

For the most part, the latest jobs report bodes well for the state.


©Copyright 2011 by CBER.

Despite Solid Job Growth the Number of Unemployed has Dropped Very Little in 2013

horvath Leave a comment

This year Colorado is expected to add over 55,000 wage and salary workers, an increase of about 2.5%. This equates to about 4,600 jobs each month.

But there is a downside.

Between January and March of this year the unemployment rate dropped slightly from 7.3% to 7.1%. Since then the rate has moved within the range of 6.9% and 7.1% (see blue line in chart below). These changes are not statistically significant.

The unemployment rate has been stagnant because there has not been a significant change in the size of the labor force or the number of unemployed.

In August, there were 194,068 unemployed workers in Colorado (see red line in chart below). As a point of reference, the lowest number of unemployed prior to the recession was 93,736 in April 2007 and the peak was 245,928 in October 2010.

The number of unemployed workers declined by 6,628 between January and August; however, there was a drop of only 1,561 between March and August. In August 2013 the number of unemployed was 194,068.

Some high tech industries are struggling to find qualified workers, particularly in specialized positions. On the other hand, the unemployment rate in other industries remains in double digits. The problem is exacerbated by the fact that a portion of the sidelined workers do not have the skills or education to fill positions in industries with low unemployment rates.

Clearly, the recovery from the Great Recession created a dysfunctional economy.

©Copyright 2011 by CBER.

September Jobs Report Shows Jobs Added at Slower Pace

horvath Leave a comment

Colorado’s average employment through August is 58,500 jobs greater than the same period last year. After a strong first quarter, the rate of job gains has tapered off slightly.

About 64% of total jobs are added in the top five sectors:

  • 11,500 jobs   Accommodations and Food Services
  • 7,300 jobs     Health Care
  • 6,800 jobs     Construction
  • 6,200 jobs     Administrative and Waste Management, excluding employment services
  • 5,400 jobs     Retail Trade

The Leisure and Hospitality sector has added about one-in-four jobs.  The L&H sector includes:

  • Accommodations and Food Services
  • Arts, Entertainment, and Recreation.

Primary jobs/high-tech-related sectors added about 10.7% of total jobs:

  • 4,900 jobs   Professional, Scientific, and Technical
  • 1,100 jobs   Corporate Headquarters (MCE)
  • 900 jobs      Manufacturing
  • -900 jobs     Information.

Cber.co tracks 22 sectors of the economy. Growth is broad-based and 19 are adding workers.

The following sectors have been flat or they posted minimal gains: Transportation, Warehousing, and Utilities; Financial Activities; and State Government, excluding Higher Education.

The three sectors showing jobs losses are:

  • -1,300 jobs    Federal Government
  • -900 jobs       Information
  • -600 jobs       Natural Resources.

Combined, these three sectors have lost 2,800 jobs in the first eight months of 2013 compared to the same period last year.

At this point, it appears that total state employment will be in the range of 55,000 to 60,000 for 2013. This is slightly higher than the Cber.co forecast.

©Copyright 2011 by CBER.

CDLE Data – Many Have Not Recovered from Great Recession

horvath Leave a comment

With great excitement the Colorado Department of Labor and Employment announced that the state’s wage and salary employment finally returned to its peak in 2008.

It took five years for the state to return to the pre-recession employment levels.

Ugh!

A closer look at the unemployment data is even more disturbing. As a result of the downturn, the number of unemployed workers increased by 123,500. To date, this number has only decreased by 51,300. In other words, the number of unemployed workers is 72,200 greater than five years ago.

Clearly, there are many in the state who have not recovered from the Great Recession and the addition of 150,000+ jobs!

For additional details about the performance of the state economy, go to the cber.co website or click here.

©Copyright 2011 by CBER.