Colorado Recovery Watch - February 2012
The February jobs report from the Bureau of Labor Statistics shows a labor market slowly moving in the right direction. Another 4,700 jobs were added between January and February, while the unemployment rate holds constant at 7.8 percent in Colorado and 8.3 percent nationally.1 At the same time, 29 states registered unemployment rate decreases, and eight posted increases. After losing 141,000 jobs during the recession, Colorado now has 61,300 fewer jobs than it had before the recession. Though the jobs market is improving, the need for public assistance programs for health care and food remains critical as enrollment continues to increase.
In February, the unemployment rate in Colorado and nationally remained constant at 7.8 percent and 8.3 percent respectively. The state’s unemployment rate is 0.8 percentage points lower than it was one year ago. Before January 2012, when it dropped to 7.8 percent, the last time the state’s unemployment rate was less than 7.9 percent was March 2009, when it was 7.7 percent. (Figure 1)
While Colorado’s unemployment rate has remained below the the national average, it ranks 31st among states.2 The most recent economic forecasts from Colorado Legislative Council Staff, released earlier this month, have improved forecasts for unemployment in 2012, though project high unemployment during the next several years. Colorado’s unemployment rate is forecast at 7.6 percent for 2012, 7.6 percent for 2013 and 7.5 percent for 2014.3The forecast also predicts wage and salary income to increase 4.6 percent in 2012.4
Current unemployment compared to past recessions
Though there have been recent improvements, today’s labor market is still an unbelievably difficult place to be a job seeker—the national unemployment rate is 8.3 percent (higher than the highest unemployment rate of the last two recessions.)
The downward trend in the state’s unemployment rate in the past year is a good sign of recovery, however, the level is still astoundingly high. Colorado's current 7.8 percent unemployment rate is also higher than the highest unemployment rate of the last two, which was 6.3 percent for the state. The most recent downturn has been far worse as Colorado’s unemployment rate peaked at 9 percent in September 2010 (38 months after the start of the recession) and has been above the current 7.8 percent since April 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 number of workers with a job or actively looking for work. About 900 workers joined the Colorado labor force in February. Since June 2011, about 14,000 workers have returned to Colorado’s labor force in search of work.
Still, there are about 27,000 fewer active workers in the labor force today than when the labor force peaked in April 2009, and about 5,000 fewer than two years ago. (Figure 3) That decrease in labor force participation has helped keep the unemployment rate lower than it otherwise would have been. Similarly, as job prospects improve, workers decide to enter or re-enter the labor force, which in turn will prevent the unemployment rate from dropping as fast as it otherwise would have.
In February, Colorado was down 61,300 jobs since the start of the recession in December 2007, a rate that ranks 21st in the nation. Despite being far below pre-recession employment levels, the trend in job growth has continued upward as Colorado reaches its highest employment level in three years. (Figure 4) Between January and February, Colorado saw an increase of 4,700 jobs. Similarly, between February 2011 and February 2012, Colorado gained 48,800 jobs. Government employment decreased in January, while private-sector jobs saw increased growth. The largest employment gains in February were with state and local government, and in education and health sectors.
When the recession began in December 2007, Colorado had 2,350,200 jobs. Since then, Colorado experienced a total of 29 months of job loss. Colorado's employment trough occurred in January, 2010 when Colorado had 141,000 fewer jobs than it did before the recession started. Now in February, 2012, Colorado has 61,300 fewer jobs.
Colorado's jobs shortfall, or the difference between the number of jobs Colorado has and the number it needs to regain its pre-recession employment rate, is 205,000. That number includes the 61,300 jobs Colorado lost plus the 143,700 jobs it needs to keep up with the 6.1% growth in population that Colorado has experienced in the 50 months since the recession began. (Figures 5-6)
As the jobs shortfall shows, Colorado has not recovered from the Great Recession. As state and federal elected officials make policy choices to deal with budget shortfalls, putting workers back to work needs to be the primary goal.
Medicaid and CHP+
Public assistance for health care remains of critical importance for Coloradans in the current recovery. Caseload growth for Medicaid and Child Health Plan Plus (CHP+), the programs that provide medical assistance to low-income residents and children, has increased about 59 percent since the start of the recession. The programs collectively enrolled an additional 8,000 Coloradans in February, bringing the total enrollment level to 707,771.6 (Figure 7) Coloradans’ increasing dependency on the 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 to the most recent count in December, 488,527 people in Colorado, about 9.5 percent of the population, received help buying food from the program. (Figure 8) That is a 7,000-person increase from the previous month and nearly double the number of people since the start of the recession.7
Long road ahead to a full recovery
Over the last two years, Colorado’s labor market has gained back nearly 74,000 jobs of the 141,000 it lost in the recession. Similarly, improved employment has brought many workers back to the labor force in search of work. However, the jobs shortfall remains significant. Taking into account that we not only have 61,000 fewer jobs now than we did before the recession started, but also should have added around 144,000 jobs during this time to keep up with population growth demonstrates how far we have to go until full recovery. Colorado’s safety nets, such as public health and food assistance, have helped hundreds of thousands of Coloradans stay afloat through the recession. These public assistance programs will continue to be vital to Colorado’s well-being in the long road ahead.
Contact: Ben Felson
303-573-5669, ext. 316
Released April 02, 2012
1 Every year, the Bureau of Labor Statistics revises its historical labor force estimates to reflect new Census Bureau population controls, updated input data, and re-estimation. These data also incorporate new seasonal adjustments for more accurate estimates. Effective with the January 2012 edition of Colorado Recovery Watch, these revised estimates will be used. As a result, the data for charts in this and future editions of Recovery Watch will differ from versions prior to January 2012 .
2 Economic Policy Institute analysis of U.S. Bureau of Labor Statistics Current Employment Survey data.
3 “Focus Colorado: Economic and Revenue Forecast,” Colorado Legislative Council Staff: Economics Section, Mar. 19, 2012.
4 “Focus Colorado: Economic and Revenue Forecast,” Colorado Legislative Council Staff: Economics Section, Mar. 19, 2012.
5 Colorado Legislative Council Staff for the chart design.
6 Analysis of “Premiums, Expenditures and Caseload Reports,” Colorado Department of Health Care Policy Financing.
7 Analysis of U.S. Department of Agriculture SNAP program data, provided by: “Latest Available Month - State Level Participation,” USDA Food and Nutrition Service.