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Colorado Recession Watch

The United States economy stagnated in July and has since been showing signs of worsening. Troublingly, national total jobless claims increased steadily during the past six weeks, and first-time jobless claims rose the past three straight weeks.i Colorado’s unemployment rate has remained unchanged for four months, and employment levels have held effectively constant for seven straight months. That prolonged stagnation is hurting Coloradans, who continue to turn to unemployment benefits (extended in late July), and are increasingly looking to public programs for help paying for food and medical expenses.

Unemployment
In July, the unemployment rate in Colorado stayed at 8 percent for the fourth straight month. 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 is the 32nd highest, and its recessionary increase in unemployment ranks 33rd worst.ii

Employment
Colorado employment decreased by 3,400 jobs during July; however, that change was not statistically meaningful. Indeed, employment in Colorado has been effectively unchanged for seven months. (Figure 2) Overall, Colorado’s employment losses have been severe during the recession despite the state’s lower-than-average unemployment rate. From the onset of the recession in December 2007, Colorado has lost 142,400 jobs, or 6 percent of its pre-recessionary labor force. As a percentage, that is the 16th largest state job loss in the country.iii

 

Depth and duration
A look at the current recession alongside the three previous recessions reveals the unusual length and depth of the Great Recession. No recession since the Great Depression has been as prolonged or as severe as the current one, which has lasted 31 months as of July.iv (Figure 3)

 

Construction jobs
The construction sector took a huge hit during the Great Recession, losing more than one-third of total employment. In July, Colorado construction employment decreased by close to 2,000 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 since the onset of the recession. Thus, the shortfall is essentially a measure of how far the economy has strayed from its pre-recessionary trajectory. In July, the Colorado job shortfall stood at 254,398 jobs. (Figure 5)

 

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 combined caseload of those programs has increased 35 percent.v During that period, the state population grew an estimated 5.9 percent, meaning that since the start of the recession, combined Medicaid and CHP+ caseload grew at a rate roughly six times faster than the state population. (Figure 6)vi That 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 assistance provided by the U.S. Department of Agriculture’s Supplemental Nutritional Assistance Program (SNAP), formerly known as food stamps. According to the most recent count, in May 2010, 413,805 Coloradans received food stamps, up 67 percent since the recession began.vii (Figure 7)

 

Uneasy silence
Worse-than-expected job losses in 2009 and 2010 indicate a full rebound is years away.viii Worse still, employers appear to be resuming layoffs nationally. If so, conditions might be set to deteriorate before they get better.

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

Released Aug. 20, 2010

 

Unless otherwise noted all figures are from the U.S. Bureau of Economic Analysis Current Employment Survey

i “Jobless claims rise to highest levels in 9 months,” The Denver Post, Aug. 19, 2010.

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

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

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

v Analysis of “Premiums, Expenditures and Caseload Report,” Colorado Department of Health Care Policy Financing, December 2007 - July 2010 reports.

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

vii Analysis of U.S. Department of Agriculture SNAP program data, provided by: “SNAP/food stamp participation data,” Food Research and Action Center, Aug. 3, 2010.

viii “Midyear report says it could be years until Colorado regains jobs lost in ’09,” The Denver Post, Aug. 20, 2010.

 

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