Tag: Job Growth

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.

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.

Large Establishments Have Added More Workers than Small Establishments Since End of Recession

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The latest ADP data shows that large companies (500+ workers) have added more private sector jobs than small companies (fewer than 20 workers) since the end of the recession.  More specifically,

  • Employment at establishments with fewer than 20 workers is 25.9% of total private sector employment. These establishments have accounted for 18.7% of total jobs added, or 1.0 million jobs.
  • Employment at establishments with 20 to 499 workers is 51.6% of total employment. These establishments have accounted for 53.6% of total jobs added, or 3.0 million jobs.
  • Employment at establishments with 500+ workers is 22.5% of total employment. These establishments have accounted for 27.7% of total jobs added, or 1.5 million jobs.

Since the end of the recession, 5.5 million private sector jobs have been added.

Since the series began in 2005, the small companies have added more workers than the large companies. More specifically,

  • Employment at establishments with fewer than 20 workers has increased by 1.9 million workers.
  • Employment at establishments with 20 to 499 workers has increased by 1.8 million.
  • Employment at establishments with 500+ workers has decreased by 1.1 million.

Private sectors jobs have increased by 2.6 million since the beginning of 2005.

Over the past 8 years, the small, medium, and large establishments have contributed to the economy in different ways.

©Copyright 2011 by CBER.

Lack of Primary Job Creation May Slow Future Employment Growth

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The Bureau of Labor Statistics recently released data showing that, on average, Colorado added almost 62,000 jobs for the first four months of the year compared to the same period last year.

As has been the case in the past, the tourism and healthcare industries led the continued expansion.  The top five sectors for growth were:

  • Accommodations and Food Services
  • Healthcare
  • B-to-B (excluding Employment Services)
  • Retail
  • Construction

About 64% of the jobs added can be attributed to these sectors.

While it is good news that jobs are being added in most sectors, the expansion may be slowed by the lack of primary/high-tech jobs – jobs that create other jobs or bring in investment from the outside. The following sectors serve as a proxy for “primary job creation.”

  • Professional, Scientific, and Technical
  • Corporate Headquarters (MCE)
  • Manufacturing
  • Information

So far this year, these sectors are responsible for adding about 10% of the jobs.

All jobs are important and interrelated, but not all jobs are equal in terms of their ability to create other jobs.

A review of the Colorado economy after four months can be found by clicking here.

©Copyright 2011 by CBER.

Recovery from Recession Led by Large Companies

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Large and small companies have had different employment patterns over the past 7-8 years.

According to employment data produced by ADP, about 17.6% of total private sector workers were employed at small companies, those with 1 to 19 workers, in January 2005. Companies with 500+ workers accounted for 17.1% of private sector employment.

Between 2005 and April 2013 the small companies expanded at a faster rate. The most recent ADP data shows the smaller companies currently account for 18.3% of private sector workers and the larger companies account for 15.9%.

The small companies had the least number of workers in January 2005. Jobs were added until July 2008, when they peaked. Employment tapered off slowly until December 2010. The number of jobs has been on the rise since.

Employment at larger companies increased slowly from January 2005 until March 2006. At that time employment began to taper off and declined for six years. Steady increases have occurred since March 2010.

The Great Recession officially ended in June 2009. Since then the small companies have added about 1.03 million workers and the large companies have added about 1.58 million.  In other words, large companies have played a greater role in the recovery than the small companies.

©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%?

horvath

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

horvath

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.

“Our Businesses Have Created Over Six Million Jobs” – True, But…

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In his State of the Union speech, President Obama stated, “After years of grueling recession, our businesses have created over six million new jobs.”

The jobs data produced by BLS tells at least four accurate, but different stories about the state of U.S. private sector employment.

1. The trough of the recession occurred in February 2010. About 6,111,000 private sector jobs were added between February 2010 and January 2013.

2. When President Obama took office in January 2009, private sector employment was 111,048,000. In January 2013, it was only 113,111,000. During the first four years of President Obama’s presidency, private sector employment increased by about 2 million workers.

3.  In December of 2000 private sector employment peaked at 111,776,000. The recovery from the 2001 recession took 54 months, or until June 2005, to return to its 2000 peak. The rebound continued until January 2008 when private sector employment peaked at 115,668,000. Just over 8.8 million jobs were lost between then and February 2010 when private sector employment bottomed out at 106,850,000, well below the peak in 2000. Specifically, in January 2009, employment dropped below the 2000 peak. Forty three months later, mid-2012, the number of jobs again exceeded the 2000 peak. At the time President Obama gave his 2013 State of the Union speech private sector employment was only about 1.2 million jobs greater than the peak in 2000.

4.  Private sector employment will not reach 2008 peak employment until mid-2014. In other words it will take about 72 months, or 6 six years for full recovery of the private sector from the 2008 recession.

The wisdom of Darrell Huff, author of How to Lie with Statistics, should be heeded when reviewing data produced by political leaders, economists, and business leaders.  Statistics can tell many stories.

©Copyright 2011 by CBER.