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Colorado Recession Watch

March was a mediocre month for the Colorado economy. Unemployment continued its second bump upward, overall employment and construction employment both declined slightly, and the demand for food and medical assistance continued to grow. March figures show national employment went positive for the first time since the recession began. But while the national recession might be coming close to an official end, a recovery is proving slow in the making.

Unemployment
In March state unemployment continued its second bump upward since the beginning of the recession, measuring 7.9 percent. (figs. 1 and 2) Although this rate is quite high, Colorado continues to stay well below the national rate. (fig. 1) The state has the 18th best state unemployment rate in the nation, along with the 15th lowest recessionary increase in unemployment.i

While dismaying, this bump might be a sign the recession is ending. Because of the design of the survey on which unemployment figures are based, only workers actively looking for work are counted as unemployed. Thus the upward trend since December might show workers are feeling more encouraged and resuming an active search for employment. However, the true mark of economic recovery will be these workers actually finding the jobs they are looking for.

 

Employment
While the U.S. economy began shedding jobs as soon as the recession began in December 2007, revised figures show the Colorado economy did not experience an overall decrease in employment until six months later, in June 2008 (fig. 3). Yet once losses began, the decline was dramatic. From peak employment in May 2008, the Colorado economy has lost 157,900 jobs, or 6.7 percent of its labor force. (fig. 4) While severe, these losses are on par with national trends — Colorado’s job losses as a percentage of the labor force rank 20th highest among the states.ii Recently, the economic downturn seems to have bottomed out. Job losses have slowed, and from December 2009 to March 2010 overall state employment has declined only slightly. (fig. 3)

 

 

A look at the current recession alongside the three previous recessions reveals the unusual depth and duration of the Great Recession. No recession since the Great Depression has been as long or as severe as the current one, which has lasted 27 months as of March 2010 and saw a 4 percent increase in unemployment at its peak.iii (fig.5)

 

Construction jobs
The construction sector has taken a huge hit during the Great Recession, losing close to one-third of total employment since the recession began. In March Colorado construction employment declined slightly. (fig.6)

 

Job shortfall
Job shortfall is a calculation to help put longer-term changes employment into context. It measures the difference between actual employment and what employment would need to be to keep up with population growth. In March 2010, the Colorado job shortfall stood at 238,996 jobs. (fig.7)

 

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 these two programs has increased 29 percent. (fig. 8) During this period, the state population grew about 3.4 percent.iv Thus, since the start of the recession, combined Medicaid and CHP+ caseload grew roughly eight times faster than the state population. This explosive growth rate in caseload underscores the economic hardship for many Coloradans, who are forced to rely on the state for medical support in staggering numbers as the recession drags on.

 

Food stamps
The recession has also created a substantial need for the nutritional assistance provided by the U.S. Departments of Agriculture’s Supplemental Nutritional Assistance Program (SNAP). In January 2010, 395,580 Coloradans received food stamps, up 60 percent since the recession began. (fig. 9)

 

Turning a corner?
With national employment growth positive for the first time since December 2007, the Great Recession may well be close to its official end. Still, the effects of the Great Recession reverberate throughout Colorado. Here the downturn has produced a quarter of increasing unemployment and no job growth. As a result Colorado continues to struggle with a growing job shortfall and a huge demand for nutritional and medical assistance.

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 Economic Policy Institute analysis of U.S. Bureau of Economic Analysis Current Employment Survey data.

ii Economic Policy Institute analysis of U.S. Bureau of Economic Analysis Current Employment Survey data.

iii NBER reporting of business cycles and contractions. http://www.nber.org/cycles.html

ivAnalysis of Colorado State Demography Office population figures. http://www.dola.state.co.us/dlg/demog/pop_totals.html

 

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