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Colorado Recession Watch

May 2010 saw mild economic improvement, along with concerns that changes might be temporary. During the month, 44 states experienced decreased or unchanged unemployment rates, and 45 states exhibited improved or unchanged employment levels. In both measures the large majority of states saw improvement rather than no change.i

During the month, Colorado did not experience a statistically meaningful change in employment level or unemployment rate. While better than economic decline, the lack of change has some observers worried because the bulk of employment gains nationally resulted from temporary hiring connected to the 2010 U.S. Census.ii As the unemployment rate stays high, the toll on state public services mounts.

Unemployment
In May, the unemployment rate in Colorado stayed constant at 8 percent. Even at this high rate, Colorado continues to perform better than the nation as a whole. (Figure 1) Relative to other states, Colorado’s unemployment rate and its recessionary increase in unemployment both rank 19th lowest.iii

 

Employment
In May 2010, Colorado employment increased 4,900 jobs; however this change was not statistically meaningful. (Figure 2) Overall, Colorado’s employment losses have been severe during the recession despite the state’s lower-than-average unemployment rate. From peak employment two years ago in May 2008, the Colorado economy has lost 154,300 jobs, a 6.5 percent reduction in employment.iv Since the recession began, the state experienced the 13th largest job loss relative to labor force.v

 

Depth and duration
A look at the current recession alongside the three previous recessions reveals the unusual length and severity of the Great Recession. No recession since the Great Depression has been as long or as severe as the current one, which has lasted 29 months as of May 2010 and saw a 4 percent increase in unemployment at its peak.vi (Figure 3)

 

Construction jobs
The construction sector took a huge hit during the Great Recession, losing roughly one-third of total employment since the recession began. In May, Colorado construction employment increased by 1,500 jobs. (Figure 4)

 

Job shortfall
Job shortfall is a calculation to help put longer-term changes in employment into context. It measures the difference between actual employment and what employment would need to be to keep up with population growth. In May 2010, the Colorado job shortfall stood at 241,557 jobs. (Figure 5) This is slightly fewer than last month.

 

Medicaid and CHP+
During the recession, Colorado has seen consistent and substantial caseload growth in Medicaid and the Children’s Basic Health Program (CHP+), programs that provide medical care for low income residents and children, respectively. Since the start of the recession, the total combined caseload of those programs has increased 31 percent. (Figure 6) During that period, the state population grew an estimated 3.9 percent.vii Since the start of the recession, combined Medicaid and CHP+ caseload grew just less than eight times faster than the state population. This explosive growth rate underscores the economic hardship for many Coloradans, who are forced to rely on the state for medical support in staggering numbers as the recession continues.

 

Food stamps
The recession has created a substantial need for the food provided by the U.S. Department of Agriculture’s Supplemental Nutritional Assistance Program (SNAP). In March 2010, 407,731 Coloradans received food stamps, up 65 percent since the recession began. (Figure 7)

 

Temporary reprieve or slow recovery?
With the bulk of states experiencing improved employment many observers speculate the recovery is underway. However, since in May the driver of improvement seems to have been temporary, there is room for doubt. Whatever the case, the increase in need for health care and food assistance in the state illustrates the real human cost of continued recession.

Contact: Alec Harris
Policy analyst
(303) 573-5669 ext. 316

 

End notes
Unless otherwise noted all figures are from the U.S. Bureau of Economic Analysis Current Employment Survey
i “Regional and State Employment and Unemployment Summary,” Bureau of Labor Statistics: Economic News Release. June 18, 2010.
ii “Census hiring in U.S. to Boost May Payrolls,” The Economic Times, June 4, 2010.
iii Economic Policy Institute analysis of U.S. Bureau of Economic Analysis Current Employment Survey data.
iv Analysis of U.S. Bureau of Economic Analysis Current Employment Survey data.
v Economic Policy Institute analysis of U.S. Bureau of Economic Analysis Current Employment Survey data.
vi NBER reporting of business cycles and contractions. http://www.nber.org/cycles.html
vii Analysis of Colorado State Demography Office population figures. http://www.dola.state.co.us/dlg/demog/pop_totals.html

 

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