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Colorado Job Growth On Solid Footing

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This post touches on a few of the national and state trends that will affect Colorado job growth through the remainder of the year. They are made In anticipation of the September release of employment data from the BLS

National Trends That Affect Colorado

Nationally, there are several trends that are relevant to Colorado:
• Jobs are being added at a slower rate than in the past, yet the U.S. is on track to add about 3 million jobs this year. This will be the fifth consecutive year for accelerated job growth.
• The slower rate of job growth is occurring for two reasons. First, the slowdown in the Chinese economy has caused a pullback in other economic growth in other countries. Second, U.S. job growth has reached a point where the past level of job growth cannot be sustained. A slowdown in this case does not suggest the country is headed for a downturn.
• Real GDP growth for 2015 will remain in the neighborhood of 2.5%.
• The service sector will continue to post solid growth through the end of the year, while manufacturing remains sluggish.
• Holiday sales will be so-so. Industry experts expect an increase of 3.5% to 4.0% compared to last year. Stronger labor markets and lower gas prices should point to stronger sales; however, the savings rate is around 4.6%. At this point consumers appear to be cautious.
• It is likely the strong level of mergers and acquisitions will continue. Companies have money and they appear to be ready to spend it when the time is right. This has impacted several companies in Colorado.

Colorado’s Economic Trends

There is conflicting employment data. The Bureau of Labor Statistics shows that Colorado employment has trended downward beginning in Q2, with a significant decline in the rate of growth in August. There are also indications the number of jobs added for the first half of the year will be revised upward with the benchmark revisions.

Either way it is likely the rate of Colorado job growth is declining, in line with the national trends. The state will feel the effects of a slower global economy. As well, Colorado has reached a level of job growth that is unsustainable.

The bottom line is that Colorado will continue to have a higher rate of job growth than the U.S. for the remainder of the year and into next year.

U.S. Posts Weak Job Growth in September

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On October 2nd the Bureau of Labor Statistics released its monthly update for U.S. nonfarm payroll employment. The number of seasonally adjusted jobs increased by a meager 142,000 workers in September.

Despite the weak job growth in September, the unemployment rate was unchanged at 5.1% and is likely to continue on a downward trend for the remainder of the year.

For the month of September job growth occurred in five major areas.

• Health care added 34,000 jobs in September. This is slightly below the average increase of 38,000 jobs per month over the prior 12 months. About 16,000 jobs were added in hospitals and another 13,000 in ambulatory health care services.

• Employment in information rose by 12,000 in September. The sector has about 44,000 more workers than a year ago.

• During September professional and business services added 31,000 jobs. This is well below the average of 45,000 per month so far this year. By comparison, the sector increased by an average of 59,000 in 2014. Notable job gains occurred in computer systems design and legal services. Because many companies in this sector are a part of the country’s advanced technology cluster, there are concerns that growth is not stronger.

• Retail trade employment rose by 24,000 in September. This is slightly less than the average monthly gain of 27,000 jobs over the past 12 months. Notable gains were in general merchandise stores and automobile dealers.

• Employment in food services and drinking places added 21,000 workers in September, well below the monthly average of 29,100 workers.

Once again, mining employment dropped sharply, this time a decrease of 10,000 workers. Most of the lost jobs were in support activities. Lower prices for a barrel of oil is taking a toll on the industry.

Employment in other major industries was similar to previous months.

Two things are unsettling about the employment report for September:
•The level of job growth is weak.
• The quality of jobs are weak. While it is great that people are finding work, many of the jobs have lower than average wages.

Time will tell whether the economy has headed south or if it has hit a bump in the road.

If the Economy is Doing so Well, Why Doesn’t it Feel More Robust? -Take II

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In the previous blog post, the topic of the economic recovery was discussed. Although it has been a solid recovery, why doesn’t it feel more robust?

The 2007 recovery was atypical in that it occurred over a period of years, as opposed to months. As a result Colorado posted accelerating job growth for four consecutive years. Essentially, the recovery from the recession was weak and gradual. At no point has the state reached a point where public and private leaders could really say, “We have arrived.”

At the national level, the U.S. will add 3.0 million jobs in 2015. Yet, the focus is on the slowdown of the global economy, not the fact that 2015 will be the fifth consecutive year of solid job growth.

Nationally, GDP growth has been subpar. It is hard to get excited when the rate of Real GDP growth is 2.0% to 2.5%. Consumer spending has increased at a similar anemic rate. In other words consumers have remained cautious, as if they are always looking over their shoulder.

The construction industry is “booming” and there is a shortage of trained workers. At the same time, the growth of the industry pales when compared to the 2000s. The good news is that housing has been built on an “as needed basis” and the chance of being overbuilt is slim.

During the recovery period, the state has suffered natural tragedies. There were multiple severe forest fires in several parts of the state, as well as flooding and drought. That was taxing on the state – fiscally and psychologically. Fortunately, Coloradans have remained resilient.

Lower oil prices have dampened growth in parts of the state that had previously experienced strong growth. It is easy to forget the risk associated with the extractive industries until the price of the commodities (oil, molybdenum, coal) drops precipitously or regulations are established that eliminate demand for these commodities.

Then there is the state government… The legislature has focused on social issues for the past couple of sessions – and that is not bad. Some feel insufficient time and resources were spent addressing issues that could improve the state’s ability to conduct business.

At one point, there was sufficient discourse to cause several counties to threaten secession from the state. At times, state government seemed dysfunctional over the past five years.

State government faces a new problem – the state economy is on solid footing and the state will generate record levels of revenue, yet the legislature will be forced to make cuts to key service areas. This conundrum is caused by the combination of Amendment 23, the Gallagher Amendment, TABOR, the initiative process, and Medicare obligations. It is difficult for legislators to govern the state in a way they feel is appropriate.

Despite the challenges and angst created by the items mentioned above, the growth of Colorado’s economy has exceeded the growth of the U.S. economy in many key areas (rate of job growth, rate of population growth, growth of Gross Domestic Product).

Unfortunately, the picture hasn’t always been rosy for the past five years, despite the many great things that have happened.

If the Economy is Doing so Well, Why Doesn’t it Feel More Robust?

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The Great Recession has been over for five years, but in many ways the economy still feels like we are still in the recovery stages.

In 2001 the business cycle was coming to an end when 9/11 exacerbated the situation. Workers in most sectors were touched by the recession. Fortunately, we could blame the downturn on the terrorists.

The country rallied, and with fiscal policies such as zero percent financing we recovered – some would say it was a false recovery because we stole sales from the future. By 2007 we were confident that all would be well, but that didn’t turn out to be the case.

In both recessions many families were hit hard, regardless of race, job title, or income level. In some cases one or both spouses lost their job, establishments went out of business, people had their houses foreclosed on, and there was no place to hide. Both recessions touched nearly everyone and the fact they were back-to-back doubled the pain.

In 2007 most economists did not see the 2007 recession coming and when they realized something was wrong, they failed to acknowledge that it was for real. In fact some of the state’s leading economists were in denial. (It is almost funny to re-read newspaper articles and emails from that era talking about the economy.)

In retrospect there were some small signs pointing to the 2007 recession, such as declines in financial employment. These signs weren’t sufficient to make anyone believe a major downturn was impending. For the most part, the public did not have access to the data and information that caused the problem. Many of those who had access to the information may not have understood the ramifications of what was actually happening. In some cases those who had access to the information conveniently ignored it. As business leaders and the public learned about the cause of the recession some felt betrayed by what happened. They had a right to be upset because the 2007 recession was not part of a normal business cycle. It was self-inflicted.

Psychologically the “back-to-back” recessions changed the structure of the way companies do business. Companies had to find ways to be successful with fewer employees. As a result they became more efficient and hired fewer workers during the recovery.

It was difficult for some of the laid off workers to come to terms with the realization they wouldn’t have a job waiting for them when things got better. It was tough for older workers to be ungraciously kicked off the payrolls. At the same time, several graduating classes of college students, with hefty student loans, were passed over because there were no jobs for them.

Many of the workers who held onto their jobs felt both blessed and cursed. They were fortunate to have a job, yet at times they were taken advantage of (minimal or no pay increases, reduced benefits, longer hours, more responsibilities). Work became a necessary burden for many.

As a result of the “back-to-back” recessions consumers changed spending patterns, particularly in retail. Many people have been more discrete with their spending, they may not spent as much they once spent, and they tend to wait for items to be on sale before they purchase them. Adults with family members who had experienced the Great Depression may have benefitted from their experiences. As the Rolling Stones said, “You can’t always get what you want, but if you try sometime you find you get what you need.”

Economists are partially to blame for the feeling the economy does not feel more robust. They continually refer back to the recession in their charts and their discussions. By continuing to refer to the recession, economists are continually reminding people how bad the economy was just a few years ago. It is difficult to feel the economy is robust when you are always looking over your shoulder.

Bureau of Labor Statistics Data May Not Correctly Tell the Story

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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.

Colorado has Diverse Cost of Living

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How does the cost of living in your area compare to Broomfield County or Yuma County? The Colorado Legislative Council collects Cost of Living data for Colorado’s 64 counties and has done so every two years since 1993 for the Public School Finance Act of 1994 for the School District Funding Formula.

The current data is from 2013. It assumes a three person household, 1,500 square foot home, with household income of $49,100.Annual expenditures are broken down as follows:
• Housing 33.8%
• Transportation 19.3%
• Food 13.6%
• Health Care 7.3%
• Entertainment 4.5%
• Apparel 3.3%
• Other Categories 18.2%

The counties are indexed off the state HHI, $49,100. Twenty-one counties are above the state value and 43 are below it.

As expected the counties in the state’s “Very High” category are the ones where the state’s prime ski areas are located.

Rank County HHI Index Index Category
1 Pitkin $84,810 172.7 Very High
2 Summit $59,836 121.9 Very High
3 San Miguel $54,717 111.4 Very High
4 Routt $54,311 110.6 Very High

Four counties are in the “High” category. Boulder County is in the “High” category. It is the Boulder MSA

Rank County HHI Index Index Category
5 Eagle $53,931 109.8 High
6 Denver $53,796 109.6 High
7 Grand $52,067 106.0 High
8 Boulder $52,041 106.0 High

Twenty-two counties are in the “Mid-Range” category. Larimer County is in the “Mid-Range” category. It is the Fort Collins MSA. Note that Park County, #21, is only a few dollars above the state average.

Rank County HHI Index Index Category
9 Hinsdale $50,800 103.5 Mid-Range
10 Gilpin $50,677 103.2 Mid-Range
11 La Plata $50,670 103.2 Mid-Range
12 Broomfield $50,651 103.2 Mid-Range
13 Gunnison $50,298 102.4 Mid-Range
14 Jefferson $50,108 102.1 Mid-Range
15 Clear Creek $49,949 101.7 Mid-Range
16 Garfield $49,777 101.4 Mid-Range
17 Lake $49,745 101.3 Mid-Range
18 Douglas $49,722 101.3 Mid-Range
19 Ouray $49,502 100.8 Mid-Range
20 San Juan $49,197 100.2 Mid-Range
21 Park $49,115 100.0 Mid-Range
22 Arapahoe $48,570 98.9 Mid-Range
23 El Paso $48,427 98.6 Mid-Range
24 Larimer $48,319 98.4 Mid-Range
25 Mineral $48,222 98.2 Mid-Range
26 Moffat $47,874 97.5 Mid-Range
27 Elbert $47,706 97.2 Mid-Range
28 Teller $47,489 96.7 Mid-Range
29 Adams $47,477 96.7 Mid-Range
30 Chaffee $47,320 96.4 Mid-Range

Sixteen counties are in the “Low” category. Weld, Mesa, and Pueblo Counties represent three of the states MSAs.

Rank County HHI Index Index Category
31 Morgan $46,604 94.9 Low
32 Delta $46,514 94.7 Low
33 Weld $46,419 94.5 Low
34 Custer $46,234 94.2 Low
35 Mesa $45,986 93.7 Low
36 Rio Blanco $45,932 93.5 Low
37 Pueblo $45,707 93.1 Low
38 Montrose $45,605 92.9 Low
39 Logan $45,519 92.7 Low
40 Rio Grande $45,301 92.3 Low
41 Alamosa $45,295 92.3 Low
42 Fremont $45,274 92.2 Low
43 Montezuma $45,206 92.1 Low
44 Jackson $44,834 91.3 Low
45 Archuleta $44,665 91.0 Low
46 Kit Carson $44,563 90.8 Low

Eighteen counties are in the “Very Low” category. These are all rural counties.

Rank County HHI Index Index Category
47 Dolores $43,943 89.5 Very Low
48 Phillips $43,713 89.0 Very Low
49 Costilla $43,537 88.7 Very Low
50 Saguache $43,331 88.3 Very Low
51 Las Animas $43,233 88.1 Very Low
52 Lincoln $43,044 87.7 Very Low
53 Huerfano $42,970 87.5 Very Low
54 Washington $42,947 87.5 Very Low
55 Yuma $42,786 87.1 Very Low
56 Sedgwick $42,781 87.1 Very Low
57 Otero $42,013 85.6 Very Low
58 Cheyenne $41,956 85.4 Very Low
59 Conejos $41,889 85.3 Very Low
60 Bent $41,477 84.5 Very Low
61 Crowley $41,440 84.4 Very Low
62 Prowers $41,197 83.9 Very Low
63 Baca $40,779 83.1 Very Low
64 Kiowa $40,438 82.4 Very Low

The Colorado Springs MSA includes El Paso and Teller Counties. They are both in the Mid-Range category, slightly below the state level of 100.

The Denver MSA has ten counties. Denver is in the “High” category and the following counties are in the “Mid-Range” category: Gilpin, Broomfield, Jefferson, Clear Creek, Douglas, Park, Arapahoe, Elbert, and Adams counties.

As can be seen, Colorado is a diverse state from many perspectives: geographically, ethnically, and from an industry mix. It is also a diverse state in terms of the cost of living. In simplistic terms, the cost of living is higher in the metro areas and the mountain resort communities and lower in the rural communities.

The Colorado Population, 5.3 million People Strong

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Colorado is noted for its diverse geography and population. In July 2014 the total Colorado population of the state’s 64 counties was 5,353,471, up from 4,338,801 in 2000 and 5,050,289 in 2010.

Colorado has 7 Metropolitan Statistical Areas (MSA). As expected, the Colorado-Lakewood-Aurora MSA is the largest with slightly more than half the state’s population. There are 4,688,482 people living in the 7 MSAs, or 87.6% of the state’s population

Denver 2,753,338 51.4%
Colorado Springs 711,364 13.3%
Fort Collins 323,863 6.0%
Boulder 313,708 5.9%
Greeley 276,079 5.2%
Pueblo 161,782 3.0%
Grand Junction 148,348 2.8%

In 2014 the state had 11 counties with populations greater than 100,000. Combined their population was 4,371,483, or 84.2% of the total Colorado population.

County Population
El Paso 665,070
Denver 664,220
Arapahoe 618,341
Jefferson 558,532
Adams 480,317
Larimer 323,863
Douglas 314,592
Boulder 313,708
Weld 276,079
Pueblo 161,782

There are 27 counties with a population between 10,000 and 62,000 people. These 27 counties have a combined population of 710,198. Broomfield is the largest county in this group with 61,826 people and
Yuma is the smallest with 10,132.

Colorado has 26 counties with a population less than 10,000 people. The combined population of these counties is 118,421. Of this group, 3 counties (Hinsdale, San Juan, and Mineral) have populations less than 1,000.

The populations for each of the state’s 64 counties is listed in the table below.

County Population % Total
El Paso 665,070 12.42%
Denver 664,220 12.41%
Arapahoe 618,341 11.55%
Jefferson 558,532 10.43%
Adams 480,317 8.97%
Larimer 323,863 6.05%
Douglas 314,592 5.88%
Boulder 313,708 5.86%
Weld 276,079 5.16%
Pueblo 161,782 3.02%
Mesa 148,348 2.77%
Broomfield 61,826 1.15%
Garfield 57,548 1.07%
La Plata 54,014 1.01%
Eagle 52,831 0.99%
Fremont 46,294 0.86%
Montrose 40,904 0.76%
Delta 30,027 0.56%
Summit 29,399 0.55%
Morgan 28,254 0.53%
Montezuma 25,812 0.48%
Elbert 24,144 0.45%
Routt 23,896 0.45%
Teller 23,394 0.44%
Logan 22,088 0.41%
Chaffee 18,454 0.34%
Otero 18,380 0.34%
Pitkin 17,645 0.33%
Park 16,383 0.31%
Alamosa 15,870 0.30%
Gunnison 15,660 0.29%
Grand 14,505 0.27%
Las Animas 14,060 0.26%
Moffat 12,870 0.24%
Archuleta 12,249 0.23%
Prowers 11,985 0.22%
Rio Grande 11,574 0.22%
Yuma 10,132 0.19%
Clear Creek 9,153 0.17%
Conejos 8,229 0.15%
San Miguel 7,823 0.15%
Kit Carson 7,818 0.15%
Lake 7,349 0.14%
Rio Blanco 6,607 0.12%
Huerfano 6,428 0.12%
Saguache 6,206 0.12%
Gilpin 5,830 0.11%
Crowley 5,551 0.10%
Bent 5,539 0.10%
Lincoln 5,508 0.10%
Washington 4,769 0.09%
Ouray 4,587 0.09%
Phillips 4,380 0.08%
Custer 4,373 0.08%
Baca 3,624 0.07%
Costilla 3,556 0.07%
Sedgwick 2,331 0.04%
Dolores 1,933 0.04%
Cheyenne 1,870 0.03%
Jackson 1,388 0.03%
Kiowa 1,385 0.03%
Hinsdale 769 0.01%
San Juan 718 0.01%
Mineral 697 0.01%
Colorado 5,353,471 100.00%

Garden of the Gods – Visitors from 36 States

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When out-of-state tourists and staycationers compile their short list of things to do and places to go in Colorado they think about activities such as skiing, rafting, golf, tennis, hiking, or biking. The top spots on their list include such gems such as Mesa Verde, Rocky Mountain National Park, and the Great Sand Dunes. Destinations include Aspen, Steamboat, Vail, Telluride, or Estes Park.

garden of the gods 170 kissing camels
The Garden of the Gods Kissing Camels

Colorado Springs and the Garden of the Gods are seldom at the head of the list of places in Colorado.. They appear to be like Don Rickles – they don’t get no respect; however, the following metrics posted in the Garden of the Gods Visitor and Nature Center suggest that may not be the case:
• The center is commemorating its 20th year of service to the park:
• 12.5 million visitors have passed through the center during that time.
• 121,876 school kids have visited the center.
• 7,254 tour buses have stopped by.
• Volunteers have logged 181,935 hours of service.
• $2.3 million has been donated to the park from the Garden of the Gods Foundation.

garden of the gods

A more impressive metric came from an informal, unscientific “back of the envelope” study by two high school girls who identified license plates on vehicles from 36 states in and around the park. The survey was conducted over a span of three and a half hours. The states included:
• Alaska
• Arizona
• Arkansas
• California
• Colorado
• Connecticut
• Dakota
• Florida
• Georgia
• Illinois
• Indiana
• Iowa
• Kansas
• Louisiana
• Maine
• Maryland
• Massachusetts
• Michigan
• Minnesota
• Missouri
• Montana
• Nebraska
• Nevada
• New Mexico
• New York
• North
• North Carolina
• Ohio
• Oklahoma
• Pennsylvania
• South Dakota
• Tennessee
• Texas
• Utah
• Virginia
• Washington
• Wyoming
The duo conducting the study estimated that inside the park, the out of state plates outnumbered the Colorado plates.

Visitors to the park enjoyed the scenery and natural beauty of the area. In addition they hiked, biked, climbed, picnicked, and snapped photographs.

From an economic perspective, opportunities to spend money within the park were limited to the Visitor and Nature Center at one of the entrances and the Trading Post inside the park. In other words, the contributions to the local economy occurred in the restaurants, hotels, gasoline stations, and retail stores in Colorado Springs, Manitou Springs, and other towns in the region.

Though the license plate data is unscientific, it illustrated the strength of Colorado and Colorado Springs as tourism attractions. Clearly, Coloradans are not the only ones who think the state is a great place to live, work, and play!

For more details check out the Garden of the Gods website.  Better yet, the next time you are in Colorado Springs, take your camera, hiking shoes, and your Ipad and count the number of out-of-state plates.

garden of the gods 186 2

 

The Impact of Job Losses in the Oil and Gas Industry on the Colorado Economy

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About a year ago the Colorado Oil and Gas Industry was turned upside down. Almost overnight the price for a barrel of oil plummeted.

Since dropping, prices for a barrel of oil have remained low, rig count has dropped, employment has declined, BUT production has remained at record levels.  At some point the disruption will become more settled and Colorado will move forward with a smaller oil and gas industry.

Projected revisions to the BLS employment data for Colorado suggest the oil and gas  industry could be reduced by 1,000 jobs for 2015.  Although the industry is small from an employment perspective, it is significant in terms of gross domestic product for the state and MSAs. This is particularly true in Mesa, Weld, and Denver counties. Much of the drilling occurs in Mesa and Weld counties and many of the headquarters or company offices  are located in the Denver MSA.

The IMPLAN model is designed to show how changes in employment or sales could impact the state economy. In this case, the Colorado Labor Market Information group has produced projections suggesting there will be a loss of 1,000 jobs in the oil and gas industry for 2015. The IMPLAN model indicates this will cause an additional loss of 1,800 indirect and induced jobs. In addition there will be a combined loss of $657 million in direct, indirect, and induced sales in the Colorado economy.

To date the robust mix of industries in Colorado has offset the job losses in the extractive industries. That is likely to continue for the remainder of the year and into 2016.

oil and gas industry

 

 

Colorado Job Growth is Solid – The Sky is Not Falling

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There has been a streak of bad economic news within the past ten days; however, the fundamentals of the U.S. and Colorado economies are solid and the sky is not falling!

The Colorado Department of Labor and Employment announced the release of data showing that on average there are 65,900 more jobs for the first seven months of 2015 than the same period in 2014. The rate of increase is about 2.7%. While this level of job growth is solid, activity on the streets is much stronger.

Internationally, concerns have temporarily shifted away from violence in the Middle East. Worries have shifted to a slowdown in the economic growth of China, the magnitude of that slowdown, and the impact it would have on the global economy.Job Growth - The Sky is Not Falling

Earlier declines in the price of oil have not had the negative impact on the state that was initially expected by some economists. Colorado is a second tier state in terms of production and companies have taken numerous steps to increase their efficiency and maintain their profitability. Layoffs in the industry may be inevitable if the price for a barrel of oil remains at its current level, in the low $40s, for an extended period.

Through seven months average employment in the extractive industries is about 700 greater than last year. That number will approach zero by the end of the year.

The recent volatility in the equity markets may be the sign of a long-overdue correction or the start of a bear market. Uncertainty in the equities market may cause consumers to remain cautious.

On a more positive note, Colorado new car registrations have been strong this year. On a YTD basis, more new cars have been registered in 2015; however, the rate of growth has slowed to about 5.0% this year, down from 11.2% growth in 2013, and 6.5% growth last year.

Net migration remains strong as people find Colorado an attractive place to live, work, and play. In part that is a driving factor for the construction industry.

On a year-to-date basis the top sectors for job growth are:
• Healthcare 14,000
• Accommodations and Food Services 13,200
• Construction 12,100

Combined these three sectors account for about 59.6% of the jobs added or 39,300 workers. Average wages for many of the occupations in these industries are well-below the state average.

There are concerns that an insufficient number of primary jobs are being added in Colorado. Primary jobs are important because they bring in money from the outside that is invested in the state economy. In addition, primary employers often have a local supply chain that supports the local economy.

To that point, the average number of manufacturing jobs is 3,900 greater than a year ago. Many of these workers have been added in the renewable energy sector and its supply chain and they are located in Weld County. The addition of new jobs in this area will offset job losses associated with the decline in the price of oil.

So far this year, the major disappointment is the Information Sector. Declines are expected to continue through the end of the year.

On a year-to-date basis, the Government sector has added about 4,900 jobs. On a percentage basis, the greatest number of jobs has been added in K-12 and higher education. After seeing cutbacks for two years, the Federal Government is on track to add about 400 positions this year.

In addition to this data, CDLE will release a report later this month showing that Colorado job growth for the first quarter may be revised upward by 15,000 to 20,000. The bottom line is that Colorado’s employment is  much stronger than currently being reported.  Unequivocally, the sky Is not falling.