Tag: Job Growth

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.

Leeds Economic Forecast Points to Slower Growth in Year Ahead – AGAIN

horvath

On December 8th Professor Richard Wobbekind and the Leeds School of Business (SOB) released the 49th annual economic forecast for Colorado. Unfortunately, the fundamentals of the 2014 outlook were as questionable as the 2012 and 2013 forecasts.

For three consecutive years (2012 to 2014) the SOB has projected fewer jobs would be added in the coming year, even though Real GDP was predicted to increase significantly in two of those three years.

A summary of the SOB forecasts from 2012 to 2014 are provided in the table below.

 

Leeds School of Business Forecast – US Real GDP and Colorado Employment

Year

Change in Real GDP

Change in State Employment

 

2012

In 2012 Real GDP will show a significant increase in the rate of growth for 2011

Fewer jobs will be added in the coming year

 

2013

In 2013 Real GDP will growth at about the same rate as 2012, a slight decrease is possible

Fewer jobs will be added in the coming year

 

2014

In 2014 Real GDP will increase at a rate almost double the 2013 rate

Fewer jobs will be added in the coming year

 

Source:  SOB BEOF publications

 

The actual data for 2012 and preliminary data for 2013 are provided in the table below.

 

Performance of the Economy – US Real GDP and Colorado Employment

Year

Change in Real GDP

Change in State Employment

 

2012

The rate of growth of 2012 was significantly greater than the rate of growth for 2011

More jobs were added in 2012 than 2011

 

2013

The 2013 preliminary rate of growth was significantly lower than the rate of growth for 2012.

More jobs were added in 2013 than 2012

 

2014

To be determined

To be determined

 

Source: BLS, BEA, CBER

 

A historical look at the recoveries from the last three recessions is instructive.

After the 1991 recession, Colorado added jobs at an increasing rate for three years (1992 to 1994). This recovery was exceptionally strong. Job growth in 1994 was second highest in state history.

  •  Following the 2001 recession, Colorado “added” jobs at an increasing rate for four years (2003 to 2006). That rate of recovery for that period was anemic, but improving. Continued job growth at an increasing rate was cut short by the 2007 recession.
  •  After the 2007 recession, Colorado has “added” jobs at an increasing rate for four years (2010 to current). The rate of recovery has been so-so. In other words, there is a strong likelihood that job growth will continue at an increasing rate in 2014.

The saying “Every blind squirrel finds an acorn now and then” can be applied to the 2012-2014 SOB forecasts. If they continue to predict the state will add fewer jobs next year than this year, at some point they will be correct. Will 2014 finally be the year they are right?

We can only hope the SOB is wrong again!

 

©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

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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.

ADP Report – Mid to Large Size Companies Adding Most Jobs

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ADP announced that the U.S. Private Sector added 130,000 jobs in October.

Ugh!

To add insult to injury, the September data was revised downwards from 166,000 to 145,000.

Ugh! At least the number is positive.

The ADP data reports that since the official end of the Great Recession the Private Sector has added 6,367,080 jobs. The number of jobs added by company size category follows.

1 to 19 employees

  • 1,251,500 jobs added
  • 19.7% of total jobs added
  • 4.4% growth since the end of the recession.
    (See chart below for jobs added since recession).

20 to 49 employees

  • 972,200 jobs added
  • 15.3% of total jobs added
  • 5.7% growth since the end of the recession.

50 to 499 employees

  • 2,328,900 jobs added
  • 36.6% of total jobs added
  • 6.1% growth since the end of the recession.

500 to 999 employees

  • 446,900 jobs added
  • 7.0% of total jobs added
  • 6.0% growth since the end of the recession.

1,000+ employees

  • 1,357,600 jobs added
  • 21.5% of total jobs added
  • 8.2% growth since the end of the recession.

Jobs have been added across all size categories; however, the data suggests it is the well-established companies that have led the recovery from the Great Recession, not the small businesses or entrepreneurs.

©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.

Colorado Legislative Council and OSPB Optimistic About 2014

horvath

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

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

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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.

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.