DENVER – Prices have gone up, but unemployment has gone down. New business registrations are through the roof, but are overtaken by resolutions. Industries hire workers, but the fastest-growing jobs are those that pay the least.
According to the Colorado Secretary of State’s Quarterly Report on Business and Economic Indicators, prepared with help from the Business Research Division at the University of Colorado Boulder Leeds School of Business, the third quarter of 2022 saw mixed signals, painting a muddled picture of the state of business affairs towards the end of the year.
What seems clear is that Colorado is outperforming the nation on many economic development metrics.
Colorado residents have “much to celebrate” as the state’s economy has made an admirable recovery from the COVID-19 pandemic, Colorado Secretary of State Jena Griswold said Tuesday morning. However, progress still needs to be made to “ensure Colorado families and the business community continue to thrive.”
A pride of the state is still its workforce.
“Colorado recorded 375,200 job losses from February 2020 to April 2020, but 437,700 jobs were added from May 2020 to September 2022, further surpassing Colorado’s pre-pandemic peak,” the report said.
In September, Colorado had the country’s second-highest labor force participation rate of 69.5% and the highest wage growth rate of 6%.
“Labor supply is a comparative advantage we have” over other states, where the workforce tends to be less skilled and marginalized, said Brian Lewandowski, executive director of the Business Research Division.
A total of 43,657 new business entities were registered in Q3 2022, most of which were LLCs, a 14.5% increase year-over-year.
Under normal circumstances, this number would be taken as a harbinger of positive economic momentum in the fourth quarter – but current circumstances are not ordinary.
During the same period of growth for new filings, “arrears increased by 8.9% and resolutions by 27.1%,” according to the indicators report, which presents “signals of business strain.”
Price hikes remain the focus of consumers and business leaders alike. There are some signs that inflation may moderate in the second half of 2022, but seemingly conflicting data points continue to blur the macro picture.
In the Denver metro area, which includes Boulder and Broomfield counties, the consumer price index rose 7.7% year over year in September, below the national growth rate of 8.2%. But core inflation rose 7.2% in the Denver area, ahead of the national inflation rate of 6.6%.
The US Federal Housing Finance Agency’s Purchase Only Home Price Index for Colorado rose 17.7% from the first quarter of 2022 to the second. Although this is a seemingly high number, the increase is only enough for the 19th highest place in the country.
“Monthly retail gasoline prices in Colorado spiked in 2022 but began to normalize as the year progressed. Prices rose 1.8% year-on-year in October, but fell 24.7% from the average in June, according to the Energy Information Administration,” said Griswold’s report.
The confusing economic outlook has caused pessimism and skepticism among Colorado’s business leaders.
“Our latest data shows that Colorado’s economy continues to excel compared to the nation,” said Rich Wobbekind, CU’s chief economist and faculty director of the Leeds Business Research Division, in a prepared statement. “However, business leaders remain pessimistic about the near-term economic outlook. Ahead of the fourth quarter of 2022, the Leeds Business Confidence Index was 39.8 [a score of 50 is considered neutral] – in bear territory.”