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Colorado Recovery Watch

National and state unemployment rates were minimally changed in September. Colorado was one of 25 states that experienced unemployment rate decreases from August to September. In light of increased labor force participation, the decreased unemployment rate is a positive sign for the state’s recovery. Public assistance programs continue to have elevated levels of enrollment.

Unemployment
In September, Colorado’s unemployment rate decreased from 8.5 percent to 8.3 percent. The current jobless rate is 1 percentage point lower than February’s 9.3 percent, which was the state’s highest unemployment rate since it began keeping records. Moreover, the unemployment rate has not been lower than 8.5 percent since 2009. The national unemployment rate saw no change at 9.1 percent, yet was 0.5 percentage points lower than one year ago. (Figure 1) Colorado’s unemployment rate has remained lower than the national average for six consecutive months, yet it ranks 27th worst among the states.

Economic forecasts from Colorado’s Legislative Council Staff project high unemployment for some time. Colorado’s unemployment rate is forecasted at 8.3 percent for 2012, 7.8 percent for 2013, and 7.1 percent for 2014.1

Current unemployment compared to past recessions
Though all recessions in the past 30 years affected Colorado’s unemployment rate, the 2007-09 recession has had an unusual residual effect on Coloradans. The highest the unemployment rate reached during the past two recessions was 6.3 percent. The current downturn has been far worse as Colorado’s unemployment rate has been 2 full percentage points higher than that level for more than two years. (Figure 2)

 

Unemployment rate and the labor force
The unemployment rate has an important connection to the size of the labor force. To be counted as unemployed, a worker must be actively looking for a job. The labor force is defined as the total number of workers with jobs or looking for work.

In September, the combination of a decreased unemployment rate and almost 8,300 workers entering the labor force is a positive indicator of economic recovery. Still, the labor force today is significantly smaller than it was at the start of the recession. There are about 72,000 fewer active workers in the labor force today than there were when the labor force peaked in April 2009. (Figure 3)

 

Employment
The decline in the unemployment rate and increase in labor force participation can be linked to a U.S. Bureau of Labor Statistics household survey that reported a 13,358 net increase in employment since August. However, another survey, which excludes the self-employed, farm jobs and striking workers, reported a net decrease of 3,900 jobs. That same survey reports in September Colorado was down 109,900 jobs since the start of the recession in December 2007, a rate that ranks 26th worst in the nation.3

Of those industries hit hardest by the recession, employment in construction and financial activities saw slight increases in September, while manufacturing employment decreased. (Figures 4-6)

 

 

 

Job shortfall
When the recession began in December 2007, Colorado had 2,350,400 jobs. Since then, Colorado has experienced 28 months of job loss. Colorado’s employment trough occurred in January 2010 when the state had 140,100 fewer jobs than it did before the recession started. In September 2011, Colorado had 109,900 fewer jobs.

Colorado’s jobs deficit, or the difference between the number of jobs the state has and the number it needs to regain its prerecession employment rate, is 259,800. (Figures 7-8) That number reflects recent employment data combined with the 149,900 jobs it needs to keep up with the 6.4 percent growth in population in the 45 months since the recession began.

Colorado has not recovered from the Great Recession. As elected officials at the state and federal levels make policy choices to deal with budget shortfalls, they should avoid decisions that threaten to throw even this very tentative recovery into reverse. Putting workers back on the job needs to be the primary goal for lawmakers.

 

 

State economic momentum
A September State Policy Reports by the Federal Funds Information for States compiled recent data on three important measures of economic vitality: personal income growth, population growth and employment growth. Using those measurements, Colorado ranked 11th among the states for economic momentum for the third quarter of 2011, just behind California and ahead of Idaho.4

Medicaid and CHP+
Since the beginning of the recession, Colorado has experienced substantial growth in Medicaid and Child Health Plan Plus (CHP+), indicating the increase in the number of low-income residents and children in need of state medical assistance. In September, these programs provided aid to 669,601 Coloradans, almost 6,000 more than the previous month and over 58,000 more than September 2010.5 (Figure 9)

 

Food assistance
Coloradans continue to increasingly rely on public food assistance to mitigate the effects of the recession. According to the most recent count in July, 464,088 Coloradans, or 9.1 percent of the population, received help buying food from the U.S. Department of Agriculture’s Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps. (Figure 10) That is a decrease of about 400 people from June.6

 

Recovery continues at slow pace
Some of the first bright economic indicators in months show signs of recovery. A decrease in the unemployment rate, though small, brings the jobless rate to its lowest level since April 2009. The first increase in the labor force since April shows workers are more hopeful in finding work. Moreover, indicators of economic momentum place Colorado ahead of most states. While those are positive signs of recovery, Coloradans continue to suffer the effects of the recession, exemplified with high enrollment levels in nutritional assistance and public health programs. The importance of public support for people across the state should be underscored through the recovery.

Contact: Ben Felson
CC/Rice Fellow
303-573-5669, ext. 316

Released Oct. 25, 2011

End notes
1 “Focus Colorado: Economic and Revenue Forecast,” Colorado Legislative Council Staff: Economics Section, Sep. 20, 2011.

2 Colorado Legislative Council Staff for the chart design.

3 Economic Policy Institute analysis of U.S. Bureau of Labor Statistics Current Employment Survey data.

4 Federal Funds Information For States, State Policy Reports, Volume 29, Issue 18. Sep. 2011.

5 Analysis of “Premiums, Expenditures and Caseload Reports,” Colorado Department of Health Care Policy Financing.

6 Analysis of U.S. Department of Agriculture SNAP program data, provided by: “Latest Available Month - State Level Participation,” USDA Food and Nutrition Service.

 

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