Colorado Recovery Watch
National and state unemployment rates decreased minimally in November. Colorado was one of 45 states that saw an unemployment rate decrease from October to November. One employment survey, which includes the self-employed and farm jobs, showed an increase in employment last month. Conflicting data come from another survey, which showed the first decline in job growth in months, contributing to a persistently high level of enrollment in public assistance programs for health care and buying food. Those programs – Medicaid, Child Health Plan Plus, and the Supplemental Nutrition Assistance Program – continue to experience record levels of use.
Colorado experienced another decrease in its unemployment rate last month, moving from 8.1 percent in October to 8.0 percent in November, though this change was not statistically significant. The national unemployment rate decreased from 9 percent to 8.6 percent in November. (Figure 1) Colorado’s unemployment rate is 0.9 percentage points lower than it was one year ago.
Colorado’s unemployment rate remains less than the national average, yet it ranks 27th worst among states.1 The most recent economic forecasts from Colorado’s Legislative Council Staff project high unemployment during the next several years. Colorado’s unemployment rate is forecasted at 8.3 percent for 2012, 7.8 percent for 2013 and 7.2 percent for 2014.2 The forecast also expects wage and salary to increase 4.4 percent in 2012.3
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 not been less than the current 8 percent since March 2009. (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. Colorado’s labor force experienced a sharp increase in November: More than 17,000 workers joined the labor force since October. The large number of people returning to search for work 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 38,000 fewer active workers in the labor force today than there was when the labor force peaked in March 2009. (Figure 3)
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 21,115 net increase in employment since October. However, another survey, which excludes the self-employed, farm jobs and striking workers, reported a net decrease of 4,500 jobs. That same survey reports that in November Colorado was down 102,800 jobs since the start of the recession in December 2007, a rate that ranks 26th worst in the nation.
Industries hit hardest by the recession – manufacturing, construction, and finance – continue to feel the effect by experiencing decreases in employment in November. (Figures 4-6)
According to the employment survey that excludes the self-employed, farm jobs and striking workers, when the recession began in December 2007, Colorado had 2,350,400 jobs. Since then, according to the same survey, 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 November 2011, Colorado had 102,800 fewer jobs.
Colorado's jobs deficit, or the difference between the number of jobs Colorado has and the number it needs to regain its pre-recession employment rate, is 258,400. That number reflects the recent employment data combined with the 155,600 jobs it needs to keep up with a 6.6 percent growth in working-age population in the 47 months since the recession began.5 (Figures 7-8) While Colorado has shown steady sign of economic improvement and stabilization in 2011, the state 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 a very tentative recovery into reverse. Putting workers back to work needs to be the primary goal for lawmakers.
Medicaid and CHP+
Public assistance for health care remains of critical importance for Coloradans in the current recovery. Caseload growth for both Medicaid and Child Health Plan Plus (CHP+), the programs that provide medical assistance to low-income residents and children, has increased more than 50 percent since the start of the recession. The programs collectively enrolled an additional 8,800 Coloradans in November, bringing the total enrollment level to 686,134.6 (Figure 9) Coloradans’ increasing dependency on those programs for medical care during the recovery is testament to their importance to the state’s wellbeing.
The U.S. Department of Agriculture’s Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps, has continued to experience increased enrollment. According the most recent count in September, 474,564 people in Colorado, or about 9 percent of the state’s population, received help buying food from the program. (Figure 10) That is a 3,200 person increase from August, and just less than double the amount of people since the start of the recession.
Economy continues to recover
While basic indicators point to a recovering economy – the unemployment rate is at its lowest since March 2009 and Coloradans are re-joining the labor force at a rapid pace – employment continues to lag behind population growth and the growing labor force. Coloradans remain vulnerable, enrolling in public health and nutritional assistance programs at high rates, underscoring the both the importance and usefulness of our safety nets. As 2011 comes to a close, Coloradans continue to struggle with the aftermath of The Great Recession. Heading into the new year, policymakers must keep in mind the effects their decisions will have on the well-being of our state.
Contact: Ben Felson
303-573-5669, ext. 316
Released Dec. 21, 2011
1 Economic Policy Institute analysis of U.S. Bureau of Labor Statistics Current Employment Survey data.
2 “Focus Colorado: Economic and Revenue Forecast,” Colorado Legislative Council Staff: Economics Section, Dec. 20, 2011.
3 “Focus Colorado: Economic and Revenue Forecast,” Colorado Legislative Council Staff: Economics Section, Dec. 20, 2011.
4 Colorado Legislative Council Staff for the chart design.
5 Economic Policy Institute analysis of U.S. Bureau of Labor Statistics Current Employment Survey data.
6 Analysis of “Premiums, Expenditures and Caseload Reports,” Colorado Department of Health Care Policy Financing.