Tag: Economic growth

SIngle Family Permits Being Added at Greater Rate than 1991-2005

horvath

Improvement in the construction industry, as measured by single family permits, has contributed to the recovery from the Great Recession.

Looking back, the number of annual permits grew steadily from 1991 to 2006.

After bottoming out in January 1991 at 587,000 annual permits and the average number of permits added that year was 751,000. In September 2005, the number of permits peaked at 1,798,000 and the average number of permits added that year was 1,685,000. Over this period of 15 years months the average number of single family permits increased at an average annual rate of 62,233 units per year.

After the Great Recession hit, the number of monthly permits bottomed out at 379,000 in February of 2011. The average number of permits issues for 2011 was 420,000. In 2013  the number of permits increased to 614,000. For this two year period, permits are being added at an average annual rate of 97,208.

The story of the construction industry continues to be one of good and bad news.  Over the past two years, the rate of new single family permits being issued is greater than during the boom years. The problem is the greater recession created such a hole, it seems like there is little construction activity.

single family permits

©Copyright 2011 by CBER.

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

horvath

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

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.

Colorado Jobs Data for October – Mixed Message

horvath

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.

Surprise – U.S. Employment up by 200,000/month from August to September

horvath

On November 8th the Bureau of Labor Statistics reported the U.S. employment was up by 204,000 in the month of October. This was a shock to many, particularly given the weak ADP numbers published in late October.

The BLS delivered a second surprise by bumping up the net jobs added for August and September. Unfortunately, the number of unemployed in October was only 44,000 less than August, and the unemployment rate, 7.3%, was the same for both months.

For the first 10 months of 2013, U.S. employment increased at an average rate of 186,300 jobs per month. This is above the monthly average for 2012 (185,000) and 2011 (175,000).

U.S. job growth was strong in the first quarter of 2013, but the increases became more tepid as the year progressed. Average job growth for the past three months is slightly above 200,000. The December release will show the extent to which Congress’ game of chicken with the Federal budget derailed this momentum.

U.S. Employment Situation

©Copyright 2011 by CBER.

U.S. Jobs Are Being Added at a Slower Rate

horvath

On October 22nd the Bureau of Labor Statistics reported the U.S. added 148,000 jobs in the month of September. For the first 9 months of 2013, U.S. employment increased at an average rate of 177,000 jobs per month. This is below the monthly average for 2012 (185,000) and slightly above the monthly average for 2011 (175,000).

Given the fact that the government shutdown delayed the publication of the jobs data, many economists believe the September value is nothing more than a placeholder that will be revised downward on November 8.

U.S. job growth was strong in the first quarter of 2013, but it has grown at a slower rate as the year has progressed. A similar pattern has occurred in Colorado.

On a positive note, the rate of growth for the state has remained stronger than the nation.

Note: The recent BLS projections do not account for job reductions attributed to the Government shutdown.


©Copyright 2011 by CBER.

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

horvath

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

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.

Agriculture Output Trended Downward 2009 to 2012 – Will There Be a Turn Around in 2013

horvath

Real Agriculture output peaked in 2009 for both Colorado and the U.S. and it has trended downward for the period 2009 to 2012.

Between 1997 and 2012, the Bureau of Economic Analysis statistics show:

  • The annualized rate of growth for U.S. Private Sector Real GDP (sum of all states) was 2.3% and the U.S. Agriculture sector increased annually at a rate of 1.7%.
  • The compound growth rate for Colorado Private Sector Real GDP was 3.1%. The Colorado Agriculture sector increased annually at a rate of 1.5%.

Although Colorado private sector output expanded at a significantly faster rate than the U.S.between 1997 and 2012, Agriculture output for the state grew at a slightly slower rate.

Between 2009 and 2012, the data shows:

  • The annualized rate of growth for U.S. Private Sector Real GDP (sum of all states) was 2.5% and the U.S. Agriculture sector decreased at an annualized rate of -6.9%.
  • The compound growth rate for Colorado Private Sector Real GDP was 2.2%. The Colorado Agriculture sector declined annually at a rate of 11.7%.

Farmers and ranchers have their fingers crossed that the downward trend will be reversed in 2013.

©Copyright 2011 by CBER.

U.S. Job Recovery Slower than Colorado

horvath

Coloradans breathed a sigh of relief when the BLS released June data showing the state’s wage and salary employment finally returned to the 2008 peak. (For more information about the Colorado situation, click here.)

Nationally, it is a much different story. The U.S. is still about a year away from returning to the 2008 job peak.

U.S. employment topped out at 138.1 million in January 2008. By February 2010, the number of wage and salary jobs had plunged to 129.3 million, a decrease of 8.8 million workers.

At the end of July 2013, 6.7 million jobs had been added since the trough and employment had reached 136.0 million. Slightly more than 2.0 million jobs are needed to reach the pre-recession peak, or about 77% of the jobs have been recovered.

Over the past year, jobs have been added at a rate of about 190,000 per month. If they continue to be added at that rate, it will take another 10 months (May 2014) before the pre-recession peak is reached.

As a result of the Great Recession, the number of unemployed workers jumped from 7.7 million in January 2008 to 15.4 million in October 2010, i.e. the number of unemployed workers doubled. Since October 2010, the number of unemployed has declined to 11.5 million, a decrease of only 3.9 million.

For many Americans, the recovery from the Great Recession has been painful. For another group, the recovery will never happen.

©Copyright 2011 by CBER.