By Ryan Hecht, Marketing Director at the Arvada Chamber
On July 19, the Arvada Chamber hosted the State of the Economy to provide a comprehensive economic forecast to our business leaders, policymakers, and community members. The event was presented by Dr. Elizabeth Ramey, Principal Economist at the Colorado Legislative Council.
Below, read six takeaways from Dr. Ramey’s presentation.
Metro Area Employment Trends
The employment trends in Colorado’s metro areas reveal a mixed picture. Unemployment rates remain low, at 3.8%, but continue to tick up “mostly in line with expectations due to monetary policy that’s meant to slow the economy.” While Colorado outperforms the nation’s 4.1% unemployment rate, it has been slipping down the ranks. The state currently has the 32nd lowest unemployment rate.
Denver experienced a significant downturn, losing over 8,000 jobs since May 2023, particularly in the leisure and hospitality sectors. In contrast, job growth in Colorado Springs and the northern regions indicates a positive trend, whereas Pueblo and the western slope saw stagnant job numbers.
Job Market Dynamics
Despite a national economic cooling, Colorado’s job market has shown resilience in adding over 55,400 nonfarm jobs over the past year, marking a 1.9% increase. The most significant gains were observed in government, education and health services, and professional and business services. In the last year, the state has seen notable losses in the information and construction industries.
Labor Force Participation
Colorado boasts one of the highest labor force participation rates in the nation at 67.9%, significantly above the national average of 62.6%. This high participation rate is largely driven by the active involvement of women in the workforce, a testament to the state’s inclusive labor market.
Population Growth and Migration
Despite its economic vibrancy, over the last three years, Colorado has recorded its lowest population growth since 1990. The natural increase in population has been on a decline and the state’s growth is increasingly dependent on net migration. Unfortunately, 2021 to 2023 witnessed some of the slowest migration rates in the last twenty years, raising concerns about future demographic trends. National immigration policies impact this growth rate, as does housing affordability in the state.
Economic Indicators
Wage growth in Colorado have outpaced the rate of inflation over the last year, providing a boost to the purchasing power of residents. Inflation has declined since 2022 and currently stands at 2.6%, reflecting a more stable economic environment. Additionally, housing unit development is beginning to catch up with the population growth, potentially alleviating some of the housing market pressures.
New Tax Credits Support Colorado’s Labor Force
In a bid to support working families and boost the labor force, Colorado has introduced a number of new tax credits. For instance, the Family Affordability Tax Credit creates a refundable tax credit for Coloradoans with children and incomes up to $85,000, applicable for tax years 2024 through 2033. The maximum credit is $3,200 for each child under 6 and $2,400 for each child aged 6 to 16. This initiative aims to alleviate financial pressures on families, encouraging greater participation in the workforce and contributing to Colorado’s economic resilience.
About the Speaker
Dr. Elizabeth A. Ramey is the principal economist and demographic analyst for the non-partisan Legislative Council Staff of the Colorado state legislature. She specializes in labor markets, agriculture, income tax, and TABOR, as well as legislative impacts on demographic disparities. Prior to joining the Legislative Council Staff in 2019, Dr. Ramey was an associate professor of economics at Hobart and William Smith Colleges in Geneva, NY and a consultant for the United Nations Conference on Trade and Development in Geneva, Switzerland.
Resources
Save the Date: October 18 – State of the Region (Mayors Roundtable)
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