On December 21st, the Colorado Legislative Council (CLC) and the Governor’s Office of State Planning and Budgeting (OSPB) released their quarterly 2016 economic forecast . (https://www.colorado.gov/cga-legislativecouncil and https://sites.google.com/a/state.co.us/ospb-live/). The two reports provide slightly different estimates for 2015 and forecasts for 2016, both of which are supported by rational explanations. A comparison of the 2015 estimates for key indicators follows.
2015 Estimates
At the national level, the major difference is that OSPB expects U.S. unemployment to be slightly higher.
At the state level there are several items to make note of:
• Both organizations have indicated stronger than anticipated population growth.
• CLC projected employment to be near the current levels published by the Bureau of Labor Statistics. OSPB projected employment to be near the estimated benchmark revisions that will be made in March.
• Inflations in Colorado is much higher than the U.S. OSPB’s projection for employment is slightly higher than the CLC projection.
• OSPB is more optimistic than CLC about the number of construction permits issued in 2015.
| U.S. Economy December 2015 Estimate for 2015 | ||
| Category | CLC | OSPB |
| Real GDP % Change | 2.5% | 2.4% |
| Employment Change % | 2.9 million
2.1% |
2.8 million
2.0% |
| Unemployment Rate | 5.0% | 5.3% |
| Inflation (CPI) | 0.1% | 0.1% |
| Colorado Economy December 2015 Estimate for 2015 | ||
| Category | CLC | OSPB |
| Population Change /% | +101,200
1.9% |
+98,000
1.8% |
| Employment Change/% | +57,600
2.3% |
+69,000
2.8% |
| Unemployment Rate | 4.0% | 4.1% |
| Retail Trade Sales (Millions)/% | $93,191
2.8% |
$94,200
4.3% |
| Home Permits (000s) | 28.6 | 31.0 |
| Denver-Boulder Inflation Rate | 1.1% | 1.5% |
2016 Forecasts
At the national level, the two groups have similar forecasts. OSPB forecasted slightly higher U.S. inflation than CLC.
At the state level there are several items to make note of:
• Both groups are projecting population growth similar to 2015.
• Both groups are forecasting continued job growth; however, it will be at a slower level. There are drastic differences in the projected employment levels.
• OSPB is much more optimistic that CLC about construction growth.
• Inflation will be about one percentage point greater than the U.S. level.
| December 2015 U.S. – 2016 Economic Forecast | ||
| Category | CLC | OSPB |
| Real GDP % Change | 2.3% | 2.3% |
| Employment Change/% | 2.6 million
1.8% |
2.4 million
1.7% |
| Unemployment Rate | 4.8% | 4.8% |
| Inflation (CPI) | 1.6% | 1.8% |
| December 2015 Colorado – 2016 Economic Forecast | ||
| Category | CLC | OSPB |
| Population Change /% | +95,200
1.7% |
+97,300
1.8% |
| Employment Change/% | +47,300
1.9% |
+66,800
2.6% |
| Unemployment Rate | 3.8% | 3.8% |
| Retail Trade Sales (Millions)/% | $98,037
5.2% |
$99,400
5.5% |
| Home Permits (000s) | 32.0 | 37.9 |
| Denver-Boulder Inflation Rate | 2.4% | 2.5% |
The bottom line is that the state is expected to show continued job growth. The question is whether or not it will be at a level that is weak to average or will be average to modest growth.