CO recession
Colorado Recovery Watch June 17, 2011 The nation’s labor market experienced little improvement during the month of May. Recovery has stagnated, keeping states at a level similar to previous months. However, even with a high unemployment rate, Colorado continues to outperform the most affected states with its slow decline in the unemployment rate for the second straight month. Even though the state is performing slightly better, high demand for food and medical assistance programs confirm the state has yet to reach a desired stable economy. Unemployment As the national unemployment rate rose from 9 percent to 9.1 percent, Colorado’s unemployment rate decreased from 8.8 percent in April to 8.7 percent in May. (Figure 1) Colorado’s unemployment rate ranks 22nd worst among states, showing only average performance compared to the rest of the country. High unemployment is likely to be a fixture of the state economy for some time. Colorado’s unemployment rate is forecasted at 8.8 percent for 2011, 8.5 percent for 2012, and 7.7 percent for 2013.1 Figure 1
Colorado below the nation in unemployment rate Unemployment rate (seasonally adjusted)
12%
10% 9.10% 8.70%
8%
6%
4%
2%
United States Colorado
0% 2007
2008
2009
2010
2011
Source: U.S. Bureau of Labor Statistics (data through May 2011)
Page 1 of 7 Colorado Fiscal Policy Institute, a project of the Colorado Center on Law and Policy 789 Sherman Street, Suite 300, Denver, Colorado 80203 / 303-573-5669 / www.cclponline.org
Current unemployment compared to past recessions Coloradans suffered a harsh reality during the 2007-09 recession. Similarly detrimental recession periods have caused high unemployment. The difference, however, is the state has been experiencing high unemployment for more than three years, something Coloradans hadn’t experienced in previous recessions. (Figure 2) Unemployment is easing slightly with time, but it has been a slow and painful journey. Figure 2
Comparison of unemployment rate over recessionary periods 10.0% 9.0% 8.0%
1981 Recession
7.0%
1990 Recession
6.0%
2001 Recession
5.0%
2007 Recession
4.0% 3.0%
2.0% 1.0% 0.0% -3 -1
1
3
5
7
9
11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 Months from start of recession Source: Economic Policy Institute analysis of U.S. Bureau of Labor Statistics Current Employment Statistics Survey (Data through May 2011)
Page 2 of 7 Colorado Fiscal Policy Institute, a project of the Colorado Center on Law and Policy 789 Sherman Street, Suite 300, Denver, Colorado 80203 / 303-573-5669 / www.cclponline.org
Unemployment rate and the labor force The unemployment rate excludes those workers who feel discouraged and cease searching for work. Therefore, a spike in the unemployment rate can be a sign of recovery as previously discouraged workers return to the labor market searching for employment. Colorado experienced this spike in the previous months, but in May the gap between unemployment and employment rate declined. Figure 3
Colorado unemployment rate and labor force (seasonally adjusted)
10%
2,800
9% 2,750
7% 6% 5%
2,700
4% 3%
Labor force
Unemployment rate
8%
2,650
2% 1% 0%
2,600 2007
2008
2009
2010 Labor force (thousands)
2011 Unemployment rate 2
Source: U.S. Bureau of Labor Statistics (data through May 2011)
Page 3 of 7 Colorado Fiscal Policy Institute, a project of the Colorado Center on Law and Policy 789 Sherman Street, Suite 300, Denver, Colorado 80203 / 303-573-5669 / www.cclponline.org
Employment At a slow but steady pace, Colorado has increased its labor force, adding 4,200 jobs in May and 12,200 jobs during the past six months. Total recessionary employment losses in Colorado have been dramatic, though. (Figure 4) In May, Colorado was down 116,100 jobs, or 4.9 percent of its nonfarm labor force since the onset of the downturn in December 2007. That loss ranks 25th worst in the country.3 With unemployment decreasing for the second straight month and employment increasing steadily, Colorado is showing signs recovery. It may take longer than Coloradans hoped for, but the signs of improvement indicate the state is moving in the right direction. Figure 4
Colorado employment rebounds slowly
Total nonfarm employment (seasonally adjusted, thouands)
2,400
2,350
2,300
2007 - 2009 Recession
2,250
2234.3 2,200
2,150
2,100 2007
2008
2009
2010
2011
Source: U.S. Bureau of Labor Statistics (data through May 2011)
Page 4 of 7 Colorado Fiscal Policy Institute, a project of the Colorado Center on Law and Policy 789 Sherman Street, Suite 300, Denver, Colorado 80203 / 303-573-5669 / www.cclponline.org
Job shortfall The job shortfall measures the difference between actual employment and what employment would have been if jobs had continued apace with working-age population growth instead of plummeting during the downturn — in short, how far the state has been “set back” by the recession in jobs. When the recession began in December 2007, Colorado had 2.35 million jobs. Since then, Colorado has experienced 27 months of job loss. Colorado’s employment trough occurred in January 2010, when the state had 140,100 fewer jobs than it did before the recession started. In May, Colorado had 116,100 fewer jobs. Colorado’s jobs deficit, or the difference between the number of jobs the state has and the number it needs to regain its pre-recession employment rate, is 254,100. That number includes the 116,100 jobs Colorado lost plus the 138,000 jobs it needs to keep up with the 5.9 percent growth in population experienced during the 41 months since the recession began. (Figure 5) Figure 5
The jobs deficit 3000 2500 2000
Jobs needed to keep up with population growth
1500
Jobs lost since December 2007
1000 Employment level since 2000
500
Jan-00 Jul-00 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11
0
Source: Economic Policy Institute analysis of U.S. Bureau of Labor Statistics Current Employment Statistics Survey
Page 5 of 7 Colorado Fiscal Policy Institute, a project of the Colorado Center on Law and Policy 789 Sherman Street, Suite 300, Denver, Colorado 80203 / 303-573-5669 / www.cclponline.org
Medicaid and CHP+ As Coloradans wait for the long-desired recovery, the number of people enrolled in Medicaid and Child Health Plan Plus (CHP+) continues to increase. (Figure 6) Since the beginning of the recession, assistance through government health programs has gone up almost 50 percent. Although the number has not increased substantially from the previous month, it is still at an alarming level. More than 583,000 low-income, senior and disabled Coloradans received assistance through Medicaid, while 1,840 children and pregnant women were served through CHP+. The continuing high levels of demand for Medicaid and CHP+ indicate the severity of devastation to Colorado’s economy. 4 Figure 6
Colorado public health insurance enrollment remains high
Medicaid and CHP+ enrollment
700,000 650,873
650,000 600,000 550,000 500,000 2007 - 2009 Recession
450,000 400,000 2007
2008
2009
2010
2011
Source: Department of Health Care Policy and Financing data (through May 2011)
Page 6 of 7 Colorado Fiscal Policy Institute, a project of the Colorado Center on Law and Policy 789 Sherman Street, Suite 300, Denver, Colorado 80203 / 303-573-5669 / www.cclponline.org
Food assistance The number of Coloradans seeking help buying food continues to increase, reaching 455,250 for the month of March. That is a 2.6 percent increase from the previous month and an 83 percent increase since the start of the recession. The constant and dramatic upward trend in food assistance provided by the U.S. Department of Agriculture’s Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps) is a clear warning that Coloradans are still struggling in the wake of the recession. (Figure 7) Figure 7
Colorado food stamp enrollment continues to grow after official end of recession 500,000
Number of individuals
450,000
455,250
400,000 350,000 300,000 250,000 2007 - 2009 Recession 200,000 2007
2008
2009
2010
2011
Source: Analysis of U.S. Department of Agriculture SNAP program data (through March 2011)
Snail’s-pace recovery Even though the state’s economy is performing better than it did a year ago and continues to show steady signs of hope, the damage of the Great Recession has not been reversed. Many Coloradans still struggle with joblessness and economic insecurity. The increase in health and food assistance, our most basic needs, gives us an understanding of the tremendous impact the recession has had on our state. Employment levels are not where desired, but continuing along this path will undoubtedly lead Colorado to full recovery. Contact: Valeria Caso Policy analyst [email protected] 303-573-5669, ext. 317 1
“Focus Colorado: Economic and Revenue Forecast,” Colorado Legislative Council Staff: Economics Section, Mar. 18, 2011. 2 Colorado Legislative Council Staff for the chart design. 3 Economic Policy Institute analysis of U.S. Bureau of Labor Statistics Current Employment Survey data. 4 Analysis of “Premiums, Expenditures and Caseload Reports,” Colorado Department of Health Care Policy Financing . Page 7 of 7 Colorado Fiscal Policy Institute, a project of the Colorado Center on Law and Policy 789 Sherman Street, Suite 300, Denver, Colorado 80203 / 303-573-5669 / www.cclponline.org
Colorado below the nation in unemployment rate Unemployment rate (seasonally adjusted)
12%
10% 9.10% 8.70%
8%
6%
4%
2%
United States Colorado
0% 2007
2008
2009
2010
2011
Source: U.S. Bureau of Labor Statistics (data through May 2011)
Page 1 of 7 Colorado Fiscal Policy Institute, a project of the Colorado Center on Law and Policy 789 Sherman Street, Suite 300, Denver, Colorado 80203 / 303-573-5669 / www.cclponline.org
Current unemployment compared to past recessions Coloradans suffered a harsh reality during the 2007-09 recession. Similarly detrimental recession periods have caused high unemployment. The difference, however, is the state has been experiencing high unemployment for more than three years, something Coloradans hadn’t experienced in previous recessions. (Figure 2) Unemployment is easing slightly with time, but it has been a slow and painful journey. Figure 2
Comparison of unemployment rate over recessionary periods 10.0% 9.0% 8.0%
1981 Recession
7.0%
1990 Recession
6.0%
2001 Recession
5.0%
2007 Recession
4.0% 3.0%
2.0% 1.0% 0.0% -3 -1
1
3
5
7
9
11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 Months from start of recession Source: Economic Policy Institute analysis of U.S. Bureau of Labor Statistics Current Employment Statistics Survey (Data through May 2011)
Page 2 of 7 Colorado Fiscal Policy Institute, a project of the Colorado Center on Law and Policy 789 Sherman Street, Suite 300, Denver, Colorado 80203 / 303-573-5669 / www.cclponline.org
Unemployment rate and the labor force The unemployment rate excludes those workers who feel discouraged and cease searching for work. Therefore, a spike in the unemployment rate can be a sign of recovery as previously discouraged workers return to the labor market searching for employment. Colorado experienced this spike in the previous months, but in May the gap between unemployment and employment rate declined. Figure 3
Colorado unemployment rate and labor force (seasonally adjusted)
10%
2,800
9% 2,750
7% 6% 5%
2,700
4% 3%
Labor force
Unemployment rate
8%
2,650
2% 1% 0%
2,600 2007
2008
2009
2010 Labor force (thousands)
2011 Unemployment rate 2
Source: U.S. Bureau of Labor Statistics (data through May 2011)
Page 3 of 7 Colorado Fiscal Policy Institute, a project of the Colorado Center on Law and Policy 789 Sherman Street, Suite 300, Denver, Colorado 80203 / 303-573-5669 / www.cclponline.org
Employment At a slow but steady pace, Colorado has increased its labor force, adding 4,200 jobs in May and 12,200 jobs during the past six months. Total recessionary employment losses in Colorado have been dramatic, though. (Figure 4) In May, Colorado was down 116,100 jobs, or 4.9 percent of its nonfarm labor force since the onset of the downturn in December 2007. That loss ranks 25th worst in the country.3 With unemployment decreasing for the second straight month and employment increasing steadily, Colorado is showing signs recovery. It may take longer than Coloradans hoped for, but the signs of improvement indicate the state is moving in the right direction. Figure 4
Colorado employment rebounds slowly
Total nonfarm employment (seasonally adjusted, thouands)
2,400
2,350
2,300
2007 - 2009 Recession
2,250
2234.3 2,200
2,150
2,100 2007
2008
2009
2010
2011
Source: U.S. Bureau of Labor Statistics (data through May 2011)
Page 4 of 7 Colorado Fiscal Policy Institute, a project of the Colorado Center on Law and Policy 789 Sherman Street, Suite 300, Denver, Colorado 80203 / 303-573-5669 / www.cclponline.org
Job shortfall The job shortfall measures the difference between actual employment and what employment would have been if jobs had continued apace with working-age population growth instead of plummeting during the downturn — in short, how far the state has been “set back” by the recession in jobs. When the recession began in December 2007, Colorado had 2.35 million jobs. Since then, Colorado has experienced 27 months of job loss. Colorado’s employment trough occurred in January 2010, when the state had 140,100 fewer jobs than it did before the recession started. In May, Colorado had 116,100 fewer jobs. Colorado’s jobs deficit, or the difference between the number of jobs the state has and the number it needs to regain its pre-recession employment rate, is 254,100. That number includes the 116,100 jobs Colorado lost plus the 138,000 jobs it needs to keep up with the 5.9 percent growth in population experienced during the 41 months since the recession began. (Figure 5) Figure 5
The jobs deficit 3000 2500 2000
Jobs needed to keep up with population growth
1500
Jobs lost since December 2007
1000 Employment level since 2000
500
Jan-00 Jul-00 Jan-01 Jul-01 Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11
0
Source: Economic Policy Institute analysis of U.S. Bureau of Labor Statistics Current Employment Statistics Survey
Page 5 of 7 Colorado Fiscal Policy Institute, a project of the Colorado Center on Law and Policy 789 Sherman Street, Suite 300, Denver, Colorado 80203 / 303-573-5669 / www.cclponline.org
Medicaid and CHP+ As Coloradans wait for the long-desired recovery, the number of people enrolled in Medicaid and Child Health Plan Plus (CHP+) continues to increase. (Figure 6) Since the beginning of the recession, assistance through government health programs has gone up almost 50 percent. Although the number has not increased substantially from the previous month, it is still at an alarming level. More than 583,000 low-income, senior and disabled Coloradans received assistance through Medicaid, while 1,840 children and pregnant women were served through CHP+. The continuing high levels of demand for Medicaid and CHP+ indicate the severity of devastation to Colorado’s economy. 4 Figure 6
Colorado public health insurance enrollment remains high
Medicaid and CHP+ enrollment
700,000 650,873
650,000 600,000 550,000 500,000 2007 - 2009 Recession
450,000 400,000 2007
2008
2009
2010
2011
Source: Department of Health Care Policy and Financing data (through May 2011)
Page 6 of 7 Colorado Fiscal Policy Institute, a project of the Colorado Center on Law and Policy 789 Sherman Street, Suite 300, Denver, Colorado 80203 / 303-573-5669 / www.cclponline.org
Food assistance The number of Coloradans seeking help buying food continues to increase, reaching 455,250 for the month of March. That is a 2.6 percent increase from the previous month and an 83 percent increase since the start of the recession. The constant and dramatic upward trend in food assistance provided by the U.S. Department of Agriculture’s Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps) is a clear warning that Coloradans are still struggling in the wake of the recession. (Figure 7) Figure 7
Colorado food stamp enrollment continues to grow after official end of recession 500,000
Number of individuals
450,000
455,250
400,000 350,000 300,000 250,000 2007 - 2009 Recession 200,000 2007
2008
2009
2010
2011
Source: Analysis of U.S. Department of Agriculture SNAP program data (through March 2011)
Snail’s-pace recovery Even though the state’s economy is performing better than it did a year ago and continues to show steady signs of hope, the damage of the Great Recession has not been reversed. Many Coloradans still struggle with joblessness and economic insecurity. The increase in health and food assistance, our most basic needs, gives us an understanding of the tremendous impact the recession has had on our state. Employment levels are not where desired, but continuing along this path will undoubtedly lead Colorado to full recovery. Contact: Valeria Caso Policy analyst [email protected] 303-573-5669, ext. 317 1
“Focus Colorado: Economic and Revenue Forecast,” Colorado Legislative Council Staff: Economics Section, Mar. 18, 2011. 2 Colorado Legislative Council Staff for the chart design. 3 Economic Policy Institute analysis of U.S. Bureau of Labor Statistics Current Employment Survey data. 4 Analysis of “Premiums, Expenditures and Caseload Reports,” Colorado Department of Health Care Policy Financing . Page 7 of 7 Colorado Fiscal Policy Institute, a project of the Colorado Center on Law and Policy 789 Sherman Street, Suite 300, Denver, Colorado 80203 / 303-573-5669 / www.cclponline.org
