Tag: Employment

Tepid Job Growth Continues

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When the Bureau of Labor Statistics announced (June 7th) that 175,000 jobs were added in May the stock market rose by 200+ points.  While the number of jobs added in May exceeded expectations, a significant downward revision in April offset those gains.

Said differently, the number of jobs added in May was comparable to the monthly average for 2011.  It is difficult to explain how that level of job growth could drive the market up.

The good news is that jobs are being added at a steady, albeit tepid pace.

On average, the U.S. has added 189,200 jobs per month in 2013. This compares to +185,000 workers in 2012 and +175,000 workers in 2011.  In other words, job growth continues to be lackluster, but well above the average for 2010 (+85,000) and 2009 (-421,000).

At this rate, U.S. employment will return to the 2008 peak some time in 2014.

©Copyright 2011 by CBER.

Most Colorado Firms have Fewer than Twenty Workers

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2012 Q3 data from the Bureau of Labor Statistics shows that Colorado has about 171,000 private sector firms.  Only 238 of those firms, or 0.1%, have 500 or more workers.  There are just under 19,000 firms, or 11.0%, with 20 to 499 workers. The majority of firms have fewer than 20 workers. Almost 152,000 firms, or 89%, are in this category.

About 1.9 million workers are employed at these private sector firms. About 238,000 workers, or 12.5%, are employed at these firms. Almost 1.1 million workers, or about 58%, are employed at firms with 20 to 499 workers. Finally, the firms with fewer than 20 workers employ about 572,000.

While the bulk of Colorado’s firms are small (<20), the majority of workers are employed at firms with 20 to 299 workers.

Note:  A similar comparison for the number of firms and total wages can be found by clicking here.

©Copyright 2011 by CBER.

Colorado Adds 62,600 Jobs in Q1 2013

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A review of 22 NAICS sectors shows that on average, Colorado added 62,600 jobs in Q1 compared to the same period last year.  Only four of the sectors posted losses (Information 1,800; Federal Government 900; Natural Resources 600; and State (Not Higher Education) 100.

The following sectors added jobs at a faster level, Q1 2013 vs. 2012:
Accommodations and Food Services; B-to-B (Not Employment); Retail Trade;  Construction;  K-12 Education;  Wholesale Trade; Health Care; Arts Entertainment, and Recreation; and Other Services.

The following sectors added jobs at the same level, Q1 2013 vs. 2012:
Corporate Headquarters (MCE), Local (Not Higher Education), and State (Not Higher Education).

The following sectors added jobs at a slower level, Q1 2013 vs. 2012:
Private Education; Information; Employment Services; Transportation, Warehousing, and Utilities;  Higher Education; Financial Activities; Federal Government; Manufacturing; Professional, Scientific, and Technical; and Natural Resources and Mining.

While it is great news that most sectors are adding jobs, it may be cause for concern that many of the state’s primary job creators have fallen in the latter category – adding jobs at a level slower than 2012.

©Copyright 2011 by CBER.

2012 CDLE Monthly Employment Numbers Didn’t Reflect Reality

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In 2012, the monthly Colorado Department of Labor and Employment (CDLE ) employment press releases told a story about the economy that did not agree with what happened on the streets.  The initial seasonally adjusted employment data depicted huge swings in employment, ranging from an unbelievable gain of 19,500 jobs in January to an equally absurd loss of 6,900 jobs in June.  This is a range of 26,500 jobs.

The initial data showed losses in two months and no growth in a third. The initial data indicated that job gains only occurred in nine months.

The benchmarked revision, released in March 2013, told a much different story. There were consistent job gains in all 12 months, rather than the erratic job growth portrayed by the initial data.  That range of job growth was 7,300 jobs, from a low of 1,700 jobs added in May to a peak of 9,000 jobs added in October.

The correlation coefficient between the initial data and the March benchmark data is .56. The coefficient of determination is .31. In other words, the relationship between the two sets of data is weak. It is difficult to understand why the initial data set does such a poor job projecting employment growth.

It is important for public and private leaders to have “accurate” data available to make critical business decisions relating to their industry. In this case, it was difficult for consumers to have confidence in the business climate when the story being told by state officials did not reflect what was actually happening on the street. CDLE must revisit its priorities. Publishing credible data is much more important than conducting a media blitz for the sake of gaining exposure for the agency.

©Copyright 2011 by CBER.

How Would You Describe Colorado’s 2010 Job Growth of 2.3%?

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The world would be a much better place if economists were not allowed to use thesauruses. Only economists use phrases and terms such as irrational exuberance, the new normal, conundrum, albeit, and exacerbated.  Even worse are their descriptors for the performance of the economy.

Some economists refer to job growth of 2.3% as encouraging, on the upswing, or comparatively modest. Others might describe that same level of growth as dismal, subpar, or in line with expectations.

The state added 51,800 jobs in 2012. In the 73 years that employment data has been recorded for Colorado, 2012 was the 18th best year in terms of absolute job growth.

If you talked to a group of sixth graders, instead of an economist, they would probably smile and give such a performance an enthusiastic thumbs-up.

The 2012 job growth can also be measured in relative terms. In other words, state employment increased by 2.3%. In the 73 years that employment data has been recorded for Colorado, 2012 was the 46th best year of relative growth.

A group of sixth graders would describe that level of growth as follows, “If I did that poorly on a test I would flunk. That sucks!”

It’s your call, how would you rate the 2012 job growth in Colorado? Would you use the verbiage of an economist or the wisdom of a sixth grader?

For more information about the performance of the Colorado economy in 2012 refer to “Review of Colorado Economy – 2012“.

©Copyright 2011 by CBER.

Colorado Adds 51,800 Jobs in 2012 – Top Growth in Low Paying Sectors

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Colorado received good news today (3/18) when the Bureau of Labor Statistics released its benchmark revisions for 2012 employment. Overall 51,800 jobs were added, well above the 40,000 mark that the BLS reported in December 2012.

Growth was led by Accommodations and Food Services (AFS); Health Care; Professional, Scientific, and Technical Services (PST); B-to-B Services (Administrative and Waste Services), Employment Services, and Retail Trade.

The best news is that the PST sector added workers. This sector has many companies that are a critical part of the state’s advanced technologies cluster.  Overall, this sector has many occupations that pay above the state average.

The growth of the B-to-B Services and Employment Services are indicators of an improvement in the business sector.  Expansion in AFS, Retail, and Other Services sectors are an indication that consumer spending has improved. Unfortunately, each of these sectors have annual wages below the state average.

Only four sectors lost jobs. Three of the four were governmental sectors.

For additional details, see the “Review of the Colorado Economy – 2012”

Copyright 2011 by CBER.

Slow Gross Job Growth – a Cause of the Weak Recovery in Colorado

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Colorado prides itself on its entrepreneurial spirit, yet, it took about 4 1/2 years to recover from the 2001 recession and it will take longer to rebound from the Great Recession.  In short, the primary reason the state experienced net job growth was a decline in gross job losses and weak gross job gains.

The Bureau of Labor Statistics produces the Business Employment Dynamics data (BDM), a data set that provides gross job added because of expansion and openings and gross jobs lost because of contractions and closures. This differs from the wage and salary data series that reports only total net jobs.

The data shows that since 2000, Gross Job Gains and Gross Job Losses have been volatile and both have trended downward.

Since 1993, between 18.1% and 24.7% of the Gross Jobs Added are from openings while between 75.3% and 81.9% are from expansions. For that same period, the range of Gross Job Lost from contractions is 77.0% to 86.4% and the range for closings has been 13.6% to 23.0%. In the short-term, Gross Losses are moving downward and Gross Additions are headed upwards.

For more information go to the report, “Why Weaker Job Growth?” on cber.co. It can be found in the Special Reports Section.

 

©Copyright 2011 by CBER.

CBER Colorado Economic Forecast 2013 – Growth Rate Similar in Year Ahead

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CBER recently released its forecast of the Colorado economy and at the risk of sounding like a broken record, 2013 will look a lot like 2012 and 2011.

  • U.S. Real GDP will be in the range of 1.9% to 2.3%
  • The U.S. will add 1.9 to 2.1 million workers
  • Colorado will account for 2.5% of U.S. jobs added
  • Colorado will add 45,000 to 55,000 workers.

Since the end of the recession, Colorado employment has had five false starts. Despite serious national and international headwinds, the state may finally have enough momentum to begin showing solid, sustained job growth beginning in the second half of 2013.

Strong Growth Category ( About 32% of total employment)

This category has consistently posted strong growth over the past two decades. In 2013, job growth will be 2.9% to 3.1%, slightly below the category’s annualized growth rate of 3.25% for 1990 to 2011.

Limited Growth Sectors (about  40% of total employment)

This category has consistently posted solid growth over the past two decades (Annualized rates for the sectors range between 1.1% to 2.2%.) In 2013, job growth will be 1.4% to 1.6%, slightly below the category’s annualized growth rate of 1.85% for 1990 to 2011.

Volatile Growth Sectors (28% of total employment)

This category has been inconsistent in its growth rates over the past two decades. It is expected to add jobs at a rate of 2.1% to 2.3%. This is above the category’s annualized growth rate of about 0.79% for 1990 to 2011. This variance from the average is a reflection of the category’s  volatility.

©Copyright 2011 by CBER.

Five False Starts – Will Strong Sustained Job Growth Occur in 2013?

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Over time, recoveries from recessions have mirrored the downturn, i.e. a steep recovery usually follows a sharp downturn. That was not the case with the 2001 or 2007 recession.

Nationally, the economy was too weak to support job growth, as evidenced by the four false starts in seasonally adjusted job growth.
• An average of 315,000 jobs was added for the three month period March to May 2010. This gain can be attributed to temporary Census workers.
• An average of 239,000 jobs was added for the three month period February to April 2011.
• An average of 252,000 jobs was added for the three month period December 2011 to February 2012.
• An average of 168,000 jobs was added for the three month period July 2012 to September 2012 – it is debatable whether this job growth to strong enough to be classified as a false start.

In Colorado, there have been five false starts since the end of the recession
• An average of 4,000 jobs was added for the seven month period February to July 2010 (One month showed declines). This anomaly was temporary Census workers.
• An average of 4,200 jobs was added for the four month period October 2010 to April 2011.
• An average of 4,300 jobs was added for the four month period July to October 2011.
• An average of 8,400 jobs was added for the three month period January to March 2012. This can be attributed to a large increase in construction workers.
• An average of 8,000 jobs was added for the three month period September to November 2012.

Most national forecasts project a slowdown in the economy during the first half of 2013. If that is the case, then the rally in the second half of 2012 will be wasted.

Will 2013 be the year that Colorado has strong sustained growth?
©Copyright 2011 by CBER.

Colorado Households Remain at Risk

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The Credability Consumer Distress Index (CCDI) shows that the financial condition of Colorado households has improved since the end of the recession, but they remain at risk. Colorado households are slightly better off than the nation.

The Index is a quarterly comprehensive picture of the average American household’s financial condition. It converts a complex set of factors into a single, easy to understand number. Financial distress is measured on a 100 point scale and a score under 70 indicates financial distress.

The index measures five categories of personal finance that reflect or lead to a secure, stable financial life—Employment, Housing, Credit, Household Budget and Net Worth. Each category has equal weighting.

90 and Above Excellent / Secure
80 – 89 Good / Stable
70 – 79 Weakening / At-Risk
60 – 69 Distressed / Unstable
Less than 60 Emergency / Crisis

From 1990 through 2002 the index was above 80; household finances were thought to be stable. From 2003 to 2008 the index dropped into the At Risk category. For seven quarters beginning in Q1 2009 the CCDI was in the unstable category. Since Q4 2011 the CCDI has been in the At Risk category. Coloradans fare better than the U.S. on the CCDI.

©Copyright 2011 by CBER.