Tag: Colorado economy

Are We Better Off Now Than We Were Four Years Ago? – Income

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The Great Recession was not kind to Coloradans in terms of employment and income.

On a positive note, Colorado’s Per Capita Personal Income (PCPI) increased between 2001 and 2011. The bad news is that it decreased sharply in 2009 and saw minimal gains in 2010 and 2011. Colorado’s 2011 PCPI is slightly below the value for 2008. Note: this data is not adjusted for inflation.

The news is less positive for Colorado’s Median Household Income (MHI). With the exception of 2007 and 2008, Colorado’s MHI, expressed in 2011 dollars, has trended downwards since 2000.

For more detailed analysis of the state of the economy compared to four years ago, visit https://cber.co or click here.

 

©Copyright 2011 by CBER.

Historical Colorado Output Growth Greater Than U.S.

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The Bureau of Economic Analysis recently released 2011 State Gross Domestic Product (GDP) data by NAICS sector. Last year the top industries for the U.S. and Colorado were similar, but they were ranked in different order.

United States Gross Domestic Product 2011 (Sum of States)
• $14.981 trillion.
• Private sector is 87.4% of total GDP; Government is 12.6%.
• Manufacturing; Real Estate/Rental/Leasing; Finance/Insurance are 32.4% of total GDP.
• Professional/ Scientific/Technical; Health Care/Social Assistance, and Retail Trade are 21.6% of the total.
Colorado Gross Domestic Product 2011
• $264.308 billion.
• Private sector is 87.2% of total GDP; Government is 12.8%.
• Real Estate/Rental/Leasing; Professional/Scientific/Technical; and Information are 30.1% of total GDP.
• Manufacturing; Finance/Insurance; and Health Care/Social Assistance are 20.7% of the total.

A quick and dirty historical analysis shows that
• Colorado’s Real GDP (2.9%) grew at a faster rate than the U.S. Real GDP (2.1%) from 1997 to 2011 as well as from 2007 to 2011 (0.7% vs. 0.0%).
• Both the private and public sector real output for Colorado grew at a faster rate than the U.S from 1997 to 2011, as well as from 2007 to 2011. Colorado is listed first in the following comparisons.
o Private sector for 1997 to 2011  3.1% vs.2.2%.
o Private sector for 2007 to 2011  0.5% vs. -0.1%.
o Public sector for 2007 to 2011  1.1% vs. 0.8%
o Public sector for 2007 to 2011  2.2% vs. 0.6%.

For the period 1997 to 2011, four sectors had negative annualized growth in the U.S.: Construction, Utilities, Mining, Construction, and Administrative/Waste Management. Construction is the only sector that posted a decline in Colorado. Colorado outperformed the nation in all sectors except Transportation/Warehousing, Real Estate/Rental/Leasing, Administrative/Waste Management, and Arts/Entertainment/Recreation.

It is important to note that some of the sectors with strongest output growth were sectors that incurred declines in jobs over this period. The Manufacturing and Information sectors are two key examples).

For a detailed analysis of the state GDP, click here (Special Reports section) or go to cber.co.

©Copyright 2011 by CBER.

Lackluster Job Growth on Tap for Remainder of 2012

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Through the first 8 months of 2012 there are 39,125 more jobs in Colorado than last year.

The average for the first 3 months was 47,300 workers with a drop-off in the next five months to 34,200.

In other words, the state is on track to hire between 35,000 and 40,000 for the year.

Two things could cause this number to drop below 35,000:
• BLS could make significant changes in future revisions. This is not likely given a recent announcement by the BLS that the recovery has been underestimated, i.e. employment numbers will be revised upwards.
• The economy could fall off a cliff as a result of an unforeseen event (9/11, Katrina, war, etc.).

Annual employment is calculated by averaging monthly employment for a 12 month period. Similarly, the annual change is the average of the month over same month differences.

As mentioned, the average change for the first 8 months of this year is 39,125 jobs and the average monthly change is trending downward. If that downward path continues the annual average will approach 35,000.

A look at several scenarios shows the change the last four months of the year will have on the 2012 average :
• If an average of 40,000 jobs is added for each of the last four months, the current average will change very little; it would increase slightly to 39,400.
• If an average of 30,000 jobs is added for each of the last four months, the annual change will be 36,100 jobs.
• If an average of 20,000 jobs is added for each of the last four months, the annual change will be 32,800 jobs.
• If an average of 10,000 jobs is added for each of the last four months, the annual change will be 29,500 jobs.
• If an average of 0 jobs is added for each of the last four months, the annual change would drop to 26,100.

At this point it seems likely that average employment for the last four months will be 30,000 or higher. While there are potential headwinds that could put the economy in a tailspin, it appears unlikely that will happen in the remaining four months.

There are two reasons to be optimistic about the final quarter. In a matter of weeks, the election will be over and the country can begin to move past the rhetoric of the campaign and start to chart a path for the next four years. Second, the the National Retail Federation recently announced that it expects holiday sales to be 4.1% greater than last year. Despite the high unemployment rate there are more people working and there are signs that some of Colorado’s volatile industries are rebounding. Sales growth at this level is a positive indicator, at least for the next three months.

While it is easy to complain about the state’s lackluster job growth of 35,000 to 40,000, it is important to keep in mind that 15 years ago Coloradans were complaining about all the people moving to Colorado and the accompanying cone zones.  Wouldn’t it be nice if we could have it both world – strong job growth and no cone zones?

For cber.co’s latest update on the Colorado economy click here.

©Copyright 2011 by CBER.

State Economic Agencies Point to Slower Growth in 2013

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The Colorado Legislative Council (CLC) and the Governor’s Office of State Planning and Budgeting (OSPB) recently released their Q3 economic updates. As can be surmised by their names, CLC and OSPB provide comprehensive economic information and forecasts to inform discussion about the state and national economies.

Their most current updates show the two groups are upbeat about the economy for 2012. At this point, they are much less optimistic about the prospects for 2013.

CLC
National Employment
2012  1.3% growth and 133,100,000 employees
2013  0.6% growth and 133,900,000 employees

National Unemployment
2012   8.3%
2013   9.1%

State Employment
2012  1.7% growth and  2,296,600 employees
2013   0.7% growth and 2,312,700 employees

State Unemployment
2012   8.3%
2013   9.4%

OSPB

National Employment
2012  1.3% growth and 133,000,000 employees
2013   0.8% growth and 134,100,000 employees

National Unemployment
2012  8.3%
2013  8.2%

State Employment
2012  1.7%  growth and  2,296,700 employees
2013  1.0%  growth and 2,320,300 employees

State Unemployment
2012  8.0%
2013  7.8%

There are notable differences between the two forecasts for 2013. This begs the question, “Are the two groups intentionally presenting best and worst case scenarios or are their differing viewpoints a legitimate indication of the diverse landscape?”

For more information about updates from OSPB click here.

To view the forecast for CLC click here.

For the most latest cber.co monthly update for Colorado click here.

 

 

©Copyright 2011 by CBER.

Colorado Job Creation Remains Lackluster

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The recent release of the Bureau of Labor Statistics’ Business Dynamics (BDM) dataset shows that Colorado job creation remains weak.

Unlike other job statistics, which report the change in net jobs, the BDM statistics measure gross job gains and gross jobs lost. The data is derived from the Quarterly Census of Employment and Wages, which explains why the lag in reporting is about 7 to 9 months.

Gross job gains were weak during 2010 and 2011, averaging 127,691 for the eight quarters. During the 7 previous quarters (Q2 2008 through Q4 2009), average quarterly gains were 124,895. This period included much of the 2007 recession. On average, gross job gains have been about the same for the period 2007 through 2011.

For the eight quarters in 2010 and 2011, average job losses were 120,452. By comparison, average job losses were 148,913 for the seven prior quarters (Q2 2008 through Q4 2009).

For 2010 and 2011, net job gains were primarily a result of reduced jobs losses and weak job gains. A variety of factors are responsible for this lack of job creation and ultimately the slow recovery.

In the chart below:
Heavy horizontal blue lines represent average gross gains for the period.
Heavy horizontal red lines represent average losses for the period.
Light blue lines represent quarterly totals (same as previous charts).
Light red lines represent quarterly totals (same as previous charts).

For additional information on the Colorado go to https://cber.co/CBEReconomy.html.

©Copyright 2011 by CBER.

Unemployment Isn’t the Same for Everybody

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This past month Coloradans took special notice when the unemployment rate was announced because it matched the U.S. rate. The July seasonally adjusted rate for both was 8.3%.

In July, the Bureau of Labor Statistics reported that there were 13.4 million unemployed Americans, based on the non-seasonally adjusted rate (NAR) of 8.6%. This is slightly higher than the more frequently publicized seasonally adjusted rate (SAR) of 8.3%.

A closer look at the data shows distinct differences based on demographics and geography.

Gender
• 6.9 million men unemployed with a NAR of 8.2%.
• 6.5 million women unemployed with a NAR of 9.0%.

Race
• .5 million unemployed Asians with a NAR of 6.2%.
• 9.5 million unemployed Whites with a NAR of 7.6%.
• 2.8 million unemployed African-Americans with a NAR of 15.0%.

Ethnic Origins
• 2.5 million unemployed Latinos with a NAR of 10.3%.

Age Groups
• 4.0 million unemployed, 16-24 years old, with a NAR of 17.1%.
• 2.8 million unemployed, 25-34 years old, with a NAR of 8.3%.
• 2.2 million unemployed, 35-44 years old, with a NAR of 6.8%.
• 2.3 million unemployed, 45-54 years old, with a NAR of 6.6%.
• 1.5 million unemployed, 55-64 years old, with a NAR of 6.3%.
• .5 million unemployed, 65+ years old, with a NAR of 7.2%.

Marital Status
• 4.4 million unemployed married people, spouse present with a NAR of 5.4%.
Despite a steady recovery, there are segments of the population that have not found jobs.

Geographic rates are available for Colorado. In July both the NAR and SAR were coincidently 8.3%.

Metropolitan Statistical Areas (MSAs)
• The NARs for the Boulder and Fort Collins MSAs were less than 8.3%
• The NAR for the Denver-Aurora-Broomfield MSA was 8.3%.
• The NARs for the Pueblo, Colorado Springs, Greeley, and Grand Junction MSAs were greater than 8.3%.

Counties (Most recent data is June 2012).
• Colorado has 64 counties, 25 have NARs greater than the state average and 1 has a NAR equal to the state rate.

• Seventeen of Colorado’s counties are part of the MSAs. Seven of the 17 have NARs greater than the state average.
• Of the 47 rural counties, 28 have NARs less than the state average, 1 has a rate equal to the state NAR, and 18 have NARs below the state average.
• Most of the rural counties with higher than average unemployment rates are on the Western Slope or the south/southwest part of the state.

Cities with populations greater than 25,000 people (Most recent data is June 2012).
• The NARs for Arvada, Boulder, Broomfield, Castle Rock, Fort Collins, Lafayette, Longmont, Loveland, Parker, and Westminster were less than 8.3%
• The NAR for Lakewood was 8.3%.
• The NARs for Aurora, Brighton, Centennial, Colorado Springs, Commerce City, Denver, Englewood, Fountain, Grand Junction, Greeley, Northglenn, Pueblo, Thornton, and Wheat Ridge.

While the state has been steadily adding jobs for two years, there are clearly parts of the state where the economy has not recovered.

For additional information on the Colorado go to https://cber.co/CBEReconomy.html.

 

©Copyright 2011 by CBER.

Colorado State Government Employment Bucks National Trend

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Across the country, state governments are slashing budgets and cutting the size of their state workforce. That is not the case in Colorado.

State employment has two components: Higher Education and State Government. Over the past two years, cber.co has reported how the Higher Education workforce has grown for the past decade.

As can be seen in the chart below, Colorado State Government employment (excluding higher education) has reported steady growth since 2004. This is contrary to the trend for the aggregate total of all states.

What lies ahead for state workers? Are these increases justified? Will the Governor continue to add workers to his team over the next year as revenues increase? What makes Colorado different from other states? Will state jobs reliant on federal funding be trimmed as adjustments are made to the federal budget? If the state population increases by 80,000 to 100,000 people every year, won’t it be necessary to add state workers to provide essential services for them? Will the state experience a post recession drop off in workers, as was the case in 2002-2004? How will the elections impact the future of the size of Colorado’s government?

Two sources are recommended for tracking the fortunes of the Colorado State Government: the Governor’s Office of State Planning and Budgeting and the Colorado Legislative Council provide quarterly updates of the state economy and finances.

To learn more about the challenges facing government leaders across the country, read The Report of the State Budget Crisis Task Force. The report focuses on six states but illustrates problems that exist in Colorado.

For additional information on the Colorado go to https://cber.co/CBEReconomy.html.

©Copyright 2011 by CBER.

Colorado Unemployment Rate Up for Fourth Month in a Row

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The Colorado unemployment rate rose for the fourth consecutive month and reached 8.3%. While the BLS indicated that this increase was not statistically significant, it is certainly significant to incumbents seeking re-election in November.

The unemployment rate is a metric that the public pays attention to. They view it as a sign that the economy is not improving – as promised. Specifically, more than 225,000 people are unemployed in Colorado.  The never-ending talk about the fiscal cliff, additional easing by the Federal Reserve, and other doom and gloom projections add to the concerns of the electorate and the woes of incumbents.
The increase to 8.3% is significant for another reason. This is the second consecutive month that the state unemployment rate has matched the U.S. Over the past decade, the Colorado rate has often been a half to a full point lower than the U.S. rate. Seldom has Colorado’s rate been equal to or higher than the nation.

The basic reason for the rise in the rate is that the size of the labor pool increased. In other words, a greater number of people began looking for jobs. Even though the public and private sector have been adding jobs for the past two years, they aren’t being added fast enough to absorb all of the interested workers.

On a positive note, initial job claims are declining. That means there are fewer layoffs.

Continuing claims are also trending downwards – ever so slowly. That means people are either finding work or their benefits have expired. The former is a positive sign, while the latter is not.

The most recent data release shows that after seven months, an average of 40,000 jobs have been added, or about 3,300 jobs per month. Two factors could cause 2012 employment to be less than 2011 (Last year the state added 33,000 jobs).

BLS periodically and systematically revises the unemployment and employment data. Revisions to the data could push the 2012 total downward (an upward revision is unlikely).

As well, there could be a downturn in employment. If employment drops to a monthly average of 23,000 for the last five months then the annual total would be 33,000, or the same as 2011.

The good news is that gross job losses appear have declined, there has been a slight increase in gross job gains, and more people are looking for work. While this scenario is not ideal, it is much better than having a rise in the unemployment rate caused by a drop off in gross job gains and an uptick in gross job losses.

 

©Copyright 2011 by CBER.

Slow Retail Trade Recovery Reflects Problems Elsewhere

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Retail trade sales are critical to state and local governments because taxes from sales provide significant revenue. In the case of local governments, sales tax revenue may account for two-thirds of total funding.

The chart (below) shows cumulative retail trade sales from 2008 through the first four months of 2012. The chart shows how sales dropped off in 2009 and 2010, but returned to 2008 levels in 2011. The data is not adjusted for inflation, so the recovered is slightly lengthier than shown in the chart. (The CPI for Colorado for these years is 3.9% for 2008; -0.6% for 2009; 1.9% for 2010; 3.7% for 2011, and 2.5% is estimated for 2012.)

Retail trade data for the first four months of 2012 show that sales are about 2.2% ahead of the 2008 four-month level and 7.7% above the 2011 four-month level. If the latter growth rate is maintained for the final eight months of the year, retail trade sales will exceed $71 million in 2012.

For additional details on the economy click here or go to https://cber.co/

©Copyright 2011 by CBER.

Employment Numbers Drive DJIA up by 217 Points

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On August 3rd the Bureau of Labor Statistics reported that the U.S. added 163,000 jobs for the month of July. Employment for May was revised upwards for the second consecutive month to 87,000; however, June was lowered from 80,000 to 64,000. The news drove the Dow Jones Industrial Average up by 217 points.

Through the first seven months of this year, the nation added about 151,000 jobs a month. This compares to a monthly average of 153,000 jobs for the first seven months of 2011. Since the end of the recession the U.S. has added net jobs in 25 months and lost net jobs in 12 months. Employment growth is consistently weak, but since October 2010 it has been consistently positive. About 3.1 million jobs have been added since the end of the recession.

About one-third of the monthly sector employment gains were in the Professional and Business Services, lead by the Temporary Help Services and Computer Systems Design sectors. Jobs were also added in health care, leisure and hospitality, manufacturing, and wholesale trade. Other major sectors were relatively flat.

On an upbeat note, the Conference Board is projecting stronger growth in the second half of 2012. Annual real output growth for the year will be about 1.9%.

Likewise, the USA TODAY/IHS Global Insight Economic Outlook Index calls for Real GDP growth to reach 2% in the latter part of the second half of the year. This index tracks 11 leading and financial indicators. The following four indicators increased – hours worked, real capital goods orders, the real money supply and light-vehicle sales.

On average, Colorado nonfarm employment is about 1.72% of the U.S. total. If Colorado grows at the same pace as the U.S. the upcoming August press release will reflect a gain of about 2,900 jobs.

©Copyright 2011 by CBER.