November 2005
National Economic Woes Continue to Impact Colorado's Economy
National economic impacts like the Gulf Coast hurricanes and energy prices continue to affect economic growth in Metro Denver and Colorado, according to data compiled by the Metro Denver Economic Development Corporation (Metro Denver EDC) in its Monthly Economic Summary for November 2005.
The impacts of the Gulf Coast hurricanes were evident in many of the national economic statistics released during the past month with rising unemployment rates, slower employment growth, higher inflation, and falling consumer confidence. Consumers continue to be plagued with rising energy prices and higher interest rates, although energy prices have retreated somewhat since last month.
Colorado’s economic conditions also weakened in the face of these challenges. In Metro Denver, only 7 of the 18 indicators moved in a positive direction for the month, down from 11 last month.
“It is important to note that the short-term pull back this month in growth rates is not unexpected. This truly is an economic 'mixed bag.' In addition to dealing with national factors, we are experiencing normal seasonal flux in employment," explained Patty Silverstein, chief economist for the Metro Denver EDC. “While some of the changes are seasonal in nature, a more cautious atmosphere prevails."
Still, annualized activity remains fairly consistent although only 14 economic variables are now posting positive changes for the year, down from 16 indicators last month. The four indicators which are not currently posting annual improvements include the stock market, home sales activity, home foreclosures and home construction.
“The good news is that Colorado's job growth is still out-pacing national rates," said Tom Clark, executive vice president of the Metro Denver EDC. “However, if the nation's diminished consumer confidence and bullish employer hiring plans continue, we might see a downturn in the first quarter of 2006."
The Monthly Economic Summary provides a snapshot of metro area economic activity and its relation to regional and national economic trends.