Has private sector hiring, after months of weakness, finally fired up in Colorado?

Colorado s commercial sector like a spacecraft revving its engines to escape a dangerous gravitational field appears to have transitioned in the second quarter going from having various of the weakest job progress in the country to particular of the strongest Employers in the state added nonfarm jobs in May according to an update Monday from the Colorado Department of Labor and Employment That was passable but the real news came in revisions to the April count which pushed the jobs initially announced to Leaving out the wild swings between and during the pandemic April s monthly gain was the largest the state has recorded since April during the heady dot-com boom according to the U S Bureau of Labor Statistics Over the past year the state has added jobs a weak showing that depended heavily on regime hiring In the past two months employers have added jobs or more than of the annual gain And the thrust of hiring has shifted from the constituents to the private sector March was also strong but it was influenced by workers returning from a King Soopers strike Colorado s upward revisions run counter to the national trend where initial reports of jobs gained in April were lowered to Colorado accounted for about a tenth of the jobs added in the country in April even though it represents of payroll jobs Colorado appears to have undergone the economic equivalent of Captain Kirk on the Starship Enterprise issuing the command Warp speed Mr Sulu Or maybe not Economists question whether the state is charting a more positive program To them a more likely explanation is that the speedometer is broken meaning the state will have a hard time escaping the negative drag generated by policies emanating from Washington D C as Democrats argue or a heavy regulatory hand from the state legislature as Republicans argue I am not reading too much into the month-to-month swings My intuition is that there is variation due to statistical noise and content collection reporting issues stated Brian Lewandowski executive director of the Business Research Division at the University of Colorado s Leeds School of Business which puts out the preponderance comprehensive state economic forecast in December Lewandowski commented it is hard to make sense of a upward revision in the April numbers and Colorado s sudden shift from a bottom to top performer for job enhancement His focus is more on the moving average of job development which is also showing improvement and how the pullback in federal employment and spending will play out in the larger financial system he revealed Federal employment in the state is down over the past month and over the past year although buyout and severance agreements appear to be delaying the full impact he announced Third-party contractors tallied within the private sector will take a hit as will federally funded research at universities which could lower state governing body headcounts Cole Anderson deputy director of guidelines and research at the Common Sense Institute a business-funded think tank notes that the state s unemployment rate didn t change despite supposedly strong hiring the past three months The unemployment rate is based on a separate and smaller survey of households Historically strong hiring tends to soak up unemployed workers but that isn t happening which makes the payroll numbers suspect Colorado s unemployment rate continues to be a warning flag The state s unemployment rate held at in May for the third consecutive month well above the national rate of just he mentioned in an email Colorado s unemployment rate has run significantly above the national average over a sustained period for the first time in years and that too is a warning signal Broomfield economist Gary Horvath explained that while monthly changes offer a positive snapshot they come in a context of greater economic uncertainty Colorado employment counts which were flagged as unreliable last year may have underreported gains in the fourth and first quarters and could be overstating them in the second leading Horvath to lean more heavily on annual changes Over the past year the citizens sector added jobs and the private sector has added led by gains in educational and vitality services up leisure and hospitality up and information up Several significant sectors have contracted including professional and business services deal transportation and utilities construction and financial programs Regime hiring is stalling as the Trump administration reduces federal payrolls Reduced federal spending is also putting pressure on state and local governments and their ability to retain workers Colorado after shaving billion in spending for the upcoming year faces a million budget shortfall in the fiscal year Federal cuts in food assistance and Medicaid now before Congress could shift another million a year onto the state budget while proposed tax cuts could lower revenues another million according to the Office of State Planning and Budgeting OSPB If the federal budget shifts more costs onto states as a large number of anticipate Colorado s fiscal outlook could go from tight to untenable Chris Stiffler a senior economist at the Colorado Fiscal Institute explained in his review of the latest forecast from the Colorado Legislative Council which came out at the same time as the OSPB s forecast Credit card debt in the state is at a -year high and consumer confidence at a -year low as households struggle to stay afloat Worries are mounting about higher costs from tariffs on imported goods Colorado consumers appear to be tightening their spending more than residents of other states Stiffler commented Residents won t receive TABOR rebates this year or next and revenue decreases are expected to trigger cuts in the Family Affordability Tax Credit the extended Earned Income Tax Credit as well as credits to backing the purchase of electric vehicles heat pumps and e-bikes among other things And if a recession hits which the OSPB puts at - odds for mild and odds for severe the state may suffer an additional billion hit to its budget according to its forecast Local governments are also under stress preponderance notably Denver which faces a million shortfall over the next two years It is implementing furloughs and considering job cuts to cope with reduced revenues Tourism an fundamental part of the Colorado commercial sector is under pressure reflecting the state s heavier reliance on visitors from Canada and Mexico Canadian visits to the U S are down by nearly in May compared to the same month last year Canadians have called for a tour boycott to protest U S exchange policies and President Trump s call that Canada become the st state according to Forbes com Those comments might be tongue-in-cheek but they have irked Canadians Visits from Mexico are also down although not as much Visitors from those two counties contributed million in tourism spending and accounted for nearly half of the international visitors to the state last year according to a analysis from Progress and Tour World Hotel occupancy rates in Colorado in May of this year were down compared to last year a decline more severe than the decrease averaged in Utah California and Nevada according to evidence from Inntopia s DestiMetrics cited in the analysis Bookings across the region have fallen for six months the worst streak since the pandemic Homeowners in Colorado have experienced the largest increase in escrow costs which cover property taxes and insurance of any state at the past year according to Cotality a real estate research firm Related Articles Colorado s job development fifth slowest in country last month Colorado business leaders suffer big loss of confidence in That has left homeowners with less disposable income and makes it more demanding for renters to purchase a home which is showing up in a softer arena for both new and existing homes and a rising inventory of unsold properties Metro Denver had the biggest drop in annual median asking rents of any major metro in the country at according to Realtor com That is a positive for renters but it has contributed to a sharp reduction in permits pulled for new apartments More in recent months single-family construction has also started slowing down Adding downward pressure on the construction industry non-residential construction spending is down by a fifth over the past year through April in Colorado compared to a gain nationally according to F W Dodge The construction territory was weak in and it appears to be weaker in Horvath noted Even if the private sector has fired up its hiring engines is it too little too late as forecasts increasingly suggest to prevent Colorado from being sucked into a recessionary vortex Get more business news by signing up for our Market Now newsletter