Tag: Economy

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

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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

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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.

Colorado Legislative Council and OSPB Optimistic About 2014

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On September 20th, both the Colorado Legislative Council (CLC) and the Governor’s Office of State Planning and Budgeting (OSPB) released their quarterly economic updates. Their preliminary look at 2014 is positive.

Highlights from the CLC outlook for 2014 are:
• The unemployment rate will drop to 6.9%.
• 55,400 wage and salary jobs will be added.
• Retail trade sales will increase by 5.4%.
• 35,400 home building permits will be issued.
• Inflation will increase by 3.2%.
In summary, CLC feels the state will continue to add jobs at a similar rate to 2013, but unemployment will not decline substantially. Retail trade sales will show strong growth and there will be a modest increase in home building permits. Inflation may become an issue.

Highlights from the OSPB outlook for 2014 are:
• The unemployment rate will decline to 6.5%.
• 57,500 wage and salary jobs will be added.
• Retail trade sales will increase by 5.4%.
• 37,300 home building permits will be issued.
• Inflation will increase by 2.4%.
Job growth will be similar to 2013, which will lead to a slight decline in unemployment. Retail trade sales will show strong growth and the housing market will post modest gains. Inflation will remain in check.

For more details, check out the CLC quarterly report  and the OSPB report by clicking here. Both groups produce comprehensive economic updates on a quarterly basis. They are “must read” material for anyone interested in the state economy. The reports are released around the 20th of the month in March, June, September, and December.

©Copyright 2011 by CBER.

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

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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

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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.

U.S. Job Recovery Slower than Colorado

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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.

CDLE Data – Many Have Not Recovered from Great Recession

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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.

Colorado Job Growth Increasing at a Declining Rate

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Colorado job gains remained solid in June; however, job growth is increasing at a declining rate. Average employment through June 2013 is 59,000 jobs greater than the same period last year.

If the data is evaluated on a quarterly basis, the number of jobs added leveled off for the period Q4 2012 to Q2 2013. In fact, there was a decrease between Q2 and Q1 of 2013.

Q4 2012   58,600

Q1 2013   61,800

Q2 2013   56,300.

On average, about 4,900 jobs have been added each month for the past three quarters.

For the period Q2 2012 to Q2 2013, the number of jobs added at the national level appears to have reached a plateau. Nationally, there was an increase in the job gains between Q2 and Q1 of 2013.

Q2 2012    2,158,000

Q3 2012    2,217,000

Q4 2012    2,188,000

Q1 2013    2,086,700

Q2 2013    2,177,300.

On average, about 180,500 jobs have been added each month for the past five quarters.

In both cases, the level of job growth is modest and expected to remain that way in the near term.

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


©Copyright 2011 by CBER.

Construction Output Declined for Eleven Years – Reversed in 2012

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Real GDP for the Construction sector finally rebounded in 2012, after decreasing for eleven years, 2001 to 2011.

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. Construction sector declined annually at a rate of -1.5%.
  • The compound growth rate for Colorado Private Sector Real GDP was 3.1%. The Colorado Construction sector declined annually at a rate of -2.4%.

For this period, the Colorado Construction sector was hit much harder than the U.S. In addition, the recovery was much slower for Colorado.

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. Construction sector increased at an annualized rate of 0.5%.
  • The compound growth rate for Colorado Private Sector Real GDP was 2.2%. The Colorado Construction sector declined annually at a rate of -1.4%.

Preliminary data suggests that 2013 Colorado Construction output will again be positive and that it will be stronger than the nation.


©Copyright 2011 by CBER.

Policy and Prices Impact Output for Extractive Industries – Is Colorado Closed for Business?

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The extractive industries are an important and visible part of Colorado’s economy. In 2012, Colorado’s GDP was 1.76% of the U.S. GDP and Colorado’s Mining sector output was 3.58% of the U.S. Mining sector output.  In other words, Colorado’s extractive industries critical components of both the state and the national economy.

Between 1997 and 2012, there were stark differences in the state and national output for the extractive industries and the private sector.

  • The annualized rate of growth for U.S. Private Sector Real GDP (sum of all states) was 2.3% and the extractive industries were -0.6%.
  • The compound growth rate for Colorado Private Sector Real GDP was 3.1% and the extractive industries grew at a rate of 3.6%.

Nationally sector output trended downward from 1997 to 2005 and trended upward from 2005 to 2009. Between 2009 and 2012, sector output trended downward again.

In Colorado sector output  trended upward from 1997 to 2009; however, it has trended downward since 2009.

  • The annualized rate of growth for U.S. Private Sector Real GDP (sum of all states) was 2.5% and extractive industry output was -2.0%.
  • The compound growth rate for Colorado Private Sector Real GDP was 2.2% and extractive industry output was -4.0%.

The variance in output has been caused by changes in prices, supply and demand, and policy. Recently, the latter has had the most detrimental impact on the industry in Colorado.  Policy and anti-fracking efforts are likely to further suppress output in the months ahead. In addition to reducing output, this will create the perception that Colorado is not a business-friendly state.


©Copyright 2011 by CBER.