Tag: November 2015

Employment Data for November Shows Continued Deterioration in Colorado Job Growth

horvath

The Bureau of Labor Statistics released wage and salary employment data for November that shows the level of Colorado job growth continued to deteriorate. In October, the jobs data reported there were 49,000 more jobs than 2014 and the difference for November was 43,600 jobs.

On a quarterly basis employment gains for 2015 are as follows:
• Q1 75,000
• Q2 60,200
• Q3 46,400
• Q4 46,300 (estimated).

The current employment data shows the state is on track to add 57,000 jobs in 2015. Henry Sobanet, Director of the Governor’s Office of State Planning and Budgeting recently stated the slowdown in the rate of job growth could be attributed to two things – the lower price of oil and the slower growth in the Chinese economy. In other words, the slowdown is a “bump in the road” and not a major recession.

Through the first eleven months of the year:
• About 78.8% of the total jobs added were in the top five sectors: Health Care; Accommodations and Food Services; Construction; Professional, Scientific, and Technical Services; and Financial Activities.
• Approximately 24.8% of all jobs added were in Leisure and Hospitality (Accommodations and Food Services plus Arts, Entertainment, and Recreation).
• About 10.9% of total jobs added were in the PST, Manufacturing, and Information Sectors. These sectors are the source of primary and advanced technology jobs.

Projected revisions, which will be made in March 2016, are estimated to bring Colorado job growth closer to the lower limit of the 2015 cber.co forecast, a forecasted increase of 73,000 to 79,000 jobs.

The total number of unemployed workers at the end of November 2015 was 102,035.

The total number of unemployed is 8,306 greater than the trough in May 2007 and 138,542 less than the peak in October 2010.

Lower unemployment rates have brought about shortages of trained workers in key sectors and occupations. The November 2015 unemployment rate of 3.6% is down from 4.3% in November 2014. In addition there are 19,567 fewer unemployed workers compared to a year ago.

The lower unemployment rates across the state are a mixed blessing. On the positive side, workers who are on the sideline will have more and better opportunities to find a job if their skills match the current openings. It is also likely that upward wage pressures my make it possible for them to be paid higher wages. On the downside there will be greater turnover at companies as people jump to “better” jobs, which may reduce productivity and drive up operational costs.

Looking ahead, 2016 stands to be a solid year if the unemployment rate will stabilize and job increases will be stronger than they were in the second half of 2015.

colorado jobs data

 

Colorado Unemployment Rate Drops to 3.6%

horvath

Earlier today the Bureau of Labor Statistics released employment and unemployment data  Colorado. It was a mixed blessing.

Unemployment

The Colorado unemployment rate for November dropped to 3.6%, down from 3.8% in October and 4.3% a year ago.

Nationally, the unemployment rate declined in 45 states compared to a year ago. By contrast only 27 states have rates lower than October. Colorado’s seasonally adjusted unemployment rate has been at or below 4.2% since December 2014 and there is little room for it to drop much further.

For job hunters this is good news as long as their skills match the available jobs. In addition, there will be upward wage pressure for occupations facing a shortage of qualified workers, such a construction, machining, and technicians.

On the other hand, the lower rate may be bad news for some companies. They may have greater difficulty finding qualified and clean workers. As a result they may have to pay higher wages for skilled positions. In addition, there is greater employee turnover during times of lower unemployment. This may decrease productivity and increase recruitment, hiring, and training costs. These increased costs will lead to lower profit margins and increased prices.

At the end of November there were 102,035 unemployed workers in Colorado. This is only 8,306 greater than the trough in May 2007 and 138,542 less than the peak in October 2010.

unemployment rate

Employment

Despite the lower unemployment rate, November wage and salary job growth was lackluster, only 43,600 greater than a year ago. During the first half of 2015 Colorado employment increased at an average monthly rate of about 5,600 jobs. That average has dropped to 3,900 jobs during the second half of the year.

Even with the declining rate of job growth Colorado will add 55,000 to 60,000 jobs this year – prior to BLS benchmark revisions that will be released in March 2016. Those revisions may push 2015 average employment to 70,000+. The leading sectors for job growth are Health Care, Accommodations and Food Services, and Construction.

As the level of job growth has tapered off there has been an increase in the number of discussions about a recession; however; the Fed’s recent decision to hike interest rates suggests the economy is on solid footing and a recession will not occur in the short-term.