Colorado Recovery Watch - March 2012
The March jobs report from the U.S. Bureau of Labor Statistics showed slight improvements in the employment market. Most states have experienced steady progress toward economic recovery: thirty states posted unemployment rate declines, while only eight states had increases, and twelve states including Colorado reported no change. Another 2,600 jobs were added in Colorado between February and March.1 More than half of the jobs lost during the 2007 recession have been recovered. Still, a robust jobs recovery has yet to solidify in Colorado or nationwide. Public safety nets, such as nutritional assistance and health coverage, continue to experience increased enrollment levels, a sign that the effects of the 2007 recession linger.
In March, Colorado’s unemployment rate remained at 7.8 percent, and the nation’s rate dropped slightly to 8.2 percent. The state’s unemployment rate is 0.7 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 national average, it ranks 31st among states.2 The most recent economic forecasts from the Colorado Legislative Council Staff, released in March, show an improved outlook for unemployment in 2012, though they project high unemployment for 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 2014.3 The forecast also predicts wage and salary income to increase 4.6 percent in 2012.4
Current unemployment compared to past recessions
Although 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 8.2 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 sign of recovery, but the jobless 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 recessions, which was 6.3 percent in 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 4,000 workers joined the Colorado labor force in March. Since March 2011, about 16,500 workers have joined the state’s labor force.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.
In March, Colorado was down 59,700 jobs since the start of the recession in December 2007, a rate that ranks 20th among states. Despite being far below pre-recession job levels, Colorado in March reached its highest employment level in three years. (Figure 4) Between February and March, Colorado saw an increase of 2,600 jobs. What’s more, between March 2011 and March 2012, Colorado gained 45,800 jobs.
When the recession began in December 2007, Colorado had 2,350,200 jobs. Since then, Colorado experienced a total of 29 months of job losses. Colorado's employment trough occurred in January 2010, when the state had 141,000 fewer jobs than before the recession started. Now, in March 2012, Colorado has 59,700 fewer jobs.Colorado's jobs shortfall, or the difference between the number of jobs the state has and the number it needs to regain its pre-recession employment rate, is 205,900. That number includes the 59,700 jobs that Colorado lost plus the 146,200 jobs it needs to keep up with the 6.2 percent growth in population that the state has experienced 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 Americans back to work needs to be their 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 61 percent since the start of the recession. The programs collectively enrolled an additional 9,000 Coloradans in March, bringing the total enrollment level to 716,599.6 (Figure 7) Compared to March 2011, enrollment in public health care programs has risen by about 10 percent, or about 68,000 people. Coloradans’ increasing dependency on the programs for medical care during the recovery is testament to their importance to the state’s well-being.
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, 491,483 people in Colorado, about 9.5 percent of the population, received help buying food from the program. (Figure 8) That is a 3,000-person increase from the previous month and nearly double the number of people since the start of the recession.7 A recent report from the U.S. Department of Agriculture found that food stamps benefits helped reduce poverty across the country by 4.4 percent between 2000 and 2009.8 The impact on the child poverty rate was even higher. These figures provide a glimpse at the important role that our public safety net has played throughout the recovery.
Long road to full recovery
Colorado has regained more than half of the jobs it lost since before the recession hit in December 2007. Such job gains cause more people to join the labor force. Some are new entrants to the market, while others have begun searching again after becoming discouraged. With this slight increase in both employment and labor force participation comes an unchanged unemployment rate.Though economic indicators continue to improve, we are not yet experiencing a full-scale, self-sustaining jobs recovery. Colorado’s safety nets, such as public health programs and food assistance, have proven their merit during the recession, helping hundreds of thousands of Coloradans stay afloat.. These programs will continue to be vital to Colorado’s well-being in the long road to recovery ahead.
Contact: Ben Felson
303-573-5669, ext. 316
Released April 20, 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.
8 U.S. Department of Agriculture Economic Research Service, Report number 132: “Alleviating Poverty in the United States. April 2012.