July 2006
Hiring pace in Metro Denver to strengthen in third quarter 2006
Job growth and unemployment rates in Metro Denver continue to outperform the nation but are taking a summer breather metro-wide, according to data compiled by the Metro Denver Economic Development Corporation (Metro Denver EDC) in its Monthly Economic Summary for July 2006.
The Metro Denver unemployment rate was unchanged from April to May at 4.3%, the lowest monthly unemployment rate since September 2001. Total nonfarm employment in Metro Denver through May is 28,600 positions higher than the same time last year, a 2.1% increase. Total employment at the state level posted a 2.3% gain through the first five months of 2006. Metro and statewide employment growth continues to outpace the nation which posted a 1.5% gain through May.
Employment growth has been the strongest in the Natural Resources & Construction (+7.0%, +6,400 jobs), Professional & Business Services (+3.1%, +6,800 jobs) and Transportation, Warehousing and Utilities (+2.5%, +1,300 jobs) sectors. The Information sector remains the only sector posting negative employment growth through May.
“The information technology sector is expected to recover late in this calendar year, and other sectors will also see a jump in hiring pace,” stated Tom Clark, executive vice president of the Metro Denver EDC. “With this increase in employment and income, we should also see an increase in home buying in early 2007.”
Inventory levels of existing homes in Metro Denver hit a record high in May, rising to 30,457 homes from 24,945 a year earlier. However, the total number of home sales also grew from April to May, increasing 16.5% to 5,010 sales, and the number of home sales in May 2006 surpassed total home sales in May 2005.
“Foreclosure rates may be high, but the combination of moderate inclines in appreciation rates, an increase in home buying, and the already strong underlying elements of our economy prove there is no need for alarm,” assured Clark.
Metro Denver’s economic data shows just half of the 18 indicators moving in a positive direction, down from 11 indicators last month. Annualized activity remained constant with 16 economic variables posting positive changes for the year, the same number as last month.
“Further increases in the federal interest rate and shifts in consumer confidence, currently perched at the top of the nine regions in the nation, will be great indicators on the direction of Metro Denver’s consumer behavior,” added Clark.
The Monthly Economic Summary provides a snapshot of metro area economic activity, as well as its relationship to national and regional economic trends.