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Colorado Recovery Watch

The national unemployment rate remained unchanged in October, not far below its recessionary peak. In Colorado, employment improved, but not enough to slow the rise of the unemployment rate to its highest level in nearly a quarter-century. Enrollment growth in state food and health assistance programs continued unabated.

Unemployment
In October, the Colorado unemployment rate increased to 8.4 percent, its highest level since the onset of the downturn. That is the highest state unemployment rate in 23 years.i In the nation as a whole, the unemployment rate remained unchanged at 9.6 percent. (Figure 1) Relative to other states, Colorado’s unemployment rate and the rate’s increase since the start of the downturn both rank 25th.ii

Recessionary employment losses in Colorado were dramatic, and low levels of employment have persisted well after the official end of the recession in June 2009. (Figure 2) Since the onset of the downturn (December 2007), Colorado has lost 142,800 jobs, or 6.1 percent of its nonfarm labor force. That loss ranks 18th worst in the country.iii In October, Colorado gained 7,100 jobs, bringing employment up to levels last seen in the beginning of 2010.

 

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 essence how far behind population growth state employment has fallen during a downturn. Tracking from the onset of the recession in December 2007 to October 2010, the Colorado job shortfall stands at 263,552 jobs. (Figure 4)

A central concept of job shortfall is that if the unemployment rate is to remain constant or improve, the number of jobs must keep up with or outpace population growth. That concept helps in part to explain why last month Colorado’s unemployment rate rose to a historic high even while 7,000 more people found jobs.iv

 

Construction jobs
The construction sector was one of the hardest hit during the Great Recession, to date losing roughly one-third of total employment since the downturn began. (Figure 4) In October, Colorado construction employment increased by 1,800 jobs after several months of no change. (Figure 4)

 

Medicaid and CHP+
In recent years, Colorado has seen consistent and substantial caseload growth in Medicaid and the Child Health Plan Plus (CHP+), programs that provide medical care for low-income residents and children, respectively. Enrollment growth in those programs accelerated during the recession and continues to outpace population growth. (Figure 5) In the current fiscal year, total Medicaid and CHP+ enrollment has grown by 13,506 as of September (the latest count). The Medicaid and CHP+ programs now serve a total of 611,258 Coloradans.v

 

Food assistance
The recession touched off 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. That need has outlived the official duration of the Great Recession. According to the most recent count in August, 424,314 Coloradans receive food stamps, up another 4,577 enrollees from July. Overall, SNAP enrollment increased 71 percent since dramatic growth began with the onset of the recent recession.vi (Figure 6)

 

More jobs needed
It is heartening that employment might be turning a corner after a long stagnation. However, the signs are preliminary and tentative. Much stronger growth will be needed to improve the unemployment rate, and more importantly, to improve the lives of Coloradans.

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

Released Nov. 23, 2010

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End notes
i Analysis of U.S. Bureau of Labor Statistics State and Local Area Unemployment data, Nov. 23, 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 Another key component is labor force dropout. Unemployed individuals who do not look for work are not counted in the unemployment rate. When conditions improve, individuals who had dropped out of the labor force often resume looking for jobs. If some find work but even more look with no success, the unemployment rate may go up even while employment increases as well.

v Analysis of “Premiums, Expenditures and Caseload Report,” Colorado Department of Health Care Policy Financing, October 2010 report.

vi Analysis of U.S. Department of Agriculture SNAP program data, provided by: “SNAP/Food /Stamp Participation Data,” Food Research and Action Center, Oct. 28, 2010.

 

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