US economy Archives - Colorado-based Business and Economic Research

ADP Report – Mid-Size Companies Adding The Most Jobs

February 6, 2014June 12, 2014 horvath Leave a comment

ADP announced that the U.S. private sector added 175,000 jobs in January. The data shows mid-size companies adding the most jobs.

Since the official end of the Great Recession the ADP data shows the private sector has added 7,418,000 jobs.

The number of jobs added by company size category follows.

1 to 19 employees

1,477,000 jobs added.
19.9% of total jobs added.
25.9% of private sector jobs.
5.2% growth since the end of the recession.
(See chart below for jobs added since the end of the recession).

20 to 49 employees

1,191,000 jobs added.
16.1% of total jobs added.
15.9% of private sector jobs.
7.0% growth since the end of the recession.

50 to 499 employees

2,674,000 jobs added.
36.0% of total jobs added.
35.6% of private sector jobs.
7.0% growth since the end of the recession.

500 to 999 employees

474,000 jobs added.
6.4% of total jobs added.
6.9% of private sector jobs.
6.4% growth since the end of the recession.

1,000+ employees

1,602,000 jobs added.
21.6% of total jobs added.
15.8% of private sector jobs.
9.7% growth since the end of the recession.

Jobs have been added across all size categories. The data show the following:

Well-established large companies (1,000+ workers) have added jobs at the fastest rate, 9.7%.
The 50 to 499 category has added the highest percentage of jobs 36.0%.
The 50 to 499 category is the largest category, 35.6% of private sector jobs.
The 50 to 499 category has added the greatest number of jobs, almost 2.7 million.

The most encouraging news is the recent increase in the growth of smaller companies.
Mid-size companies adding the most jobs

Jobs and Output Data Point to Stronger Growth for Colorado

December 20, 2013December 20, 2013 horvath Leave a comment

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.

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

December 12, 2013December 12, 2013 horvath Leave a comment

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!

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

November 12, 2013June 19, 2014 horvath Leave a comment

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

ADP Report – Mid to Large Size Companies Adding Most Jobs

October 31, 2013October 31, 2013 horvath Leave a comment

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.

U.S. Jobs Are Being Added at a Slower Rate

October 23, 2013October 23, 2013 horvath Leave a comment

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.

Agriculture Output Trended Downward 2009 to 2012 – Will There Be a Turn Around in 2013

August 8, 2013August 8, 2013 horvath Leave a comment

Real Agriculture output peaked in 2009 for both Colorado and the U.S. and it has trended downward for the period 2009 to 2012.

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. Agriculture sector increased annually at a rate of 1.7%.
The compound growth rate for Colorado Private Sector Real GDP was 3.1%. The Colorado Agriculture sector increased annually at a rate of 1.5%.

Although Colorado private sector output expanded at a significantly faster rate than the U.S.between 1997 and 2012, Agriculture output for the state grew at a slightly slower rate.

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. Agriculture sector decreased at an annualized rate of -6.9%.
The compound growth rate for Colorado Private Sector Real GDP was 2.2%. The Colorado Agriculture sector declined annually at a rate of 11.7%.

Farmers and ranchers have their fingers crossed that the downward trend will be reversed in 2013.

U.S. Job Recovery Slower than Colorado

August 2, 2013August 2, 2013 horvath Leave a comment

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.

Colorado Job Growth Increasing at a Declining Rate

July 21, 2013July 21, 2013 horvath Leave a comment

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.

Construction Output Declined for Eleven Years – Reversed in 2012

July 15, 2013July 15, 2013 horvath Leave a comment

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.