June 2006
Gas prices, rising interest rates remain a 'wild card' in economic picture
Despite rising gas prices and interest rates, Metro Denver's economy continues to show solid, sustained growth, according to data compiled by the Metro Denver Economic Development Corporation (Metro Denver EDC) in its Monthly Economic Summary for June 2006.
Metro Denver payrolls increased by 10,700 positions from March to April, largely due to hiring activity in the Professional & Business Services (+4,700 jobs), Leisure & Hospitality (+2,600 jobs), and Natural Resources & Construction (+1,500 jobs) sectors. The Manufacturing and Government sectors were the only categories to report losses in April, albeit by a total of only 300 positions.
“Total employment in the Metro Denver region is up 2.2 percent through the first four months of the year, representing a gain of 28,600 positions,” said Tom Clark, executive vice president of the Metro Denver EDC. “This type of solid, predictable growth is good for long-term economic stability. Rising gas prices and interest rates, however, remain a 'wild card' in our economic picture."
On a year-to-date basis, employment gains have been the strongest in the Natural Resources & Construction (+7.1%, +6,400 jobs), Professional & Business Services (+3.1%, +6,600 jobs), Wholesale & Retail Trade (+2.3%, +4,700 jobs), and Educational & Health Services (+2.3%, +3,100 jobs) sectors. Information employment is up 600 jobs since January 2006, but still stands 4.1%, or 2,400 positions, below average employment levels at this time last year. The Information sector is the only sector to report an annualized loss through April.
After three years of lagging the nation, personal income levels in Colorado are once again growing at rates higher than the national average. Per capita personal income in Colorado is the tenth highest in the nation at $37,946, according to preliminary 2005 data from the U.S. Bureau of Economic Analysis. Colorado’s per capita personal income grew 5.1 percent from 2004 to 2005, the 24th fastest rate in the nation. The average per capita income in the U.S. is $34,586 which represents a 4.6 percent increase from 2004.
With a few exceptions, such as the residential real estate market and employment in the Information sector, most facets of the Metro Denver economy continue to move forward at healthy rates. Eleven of the indicators moved in a positive direction this month, up from 10 indicators last month. Annualized activity softened slightly with 16 economic variables posting positive changes for the year, down from 17 last month. Foreclosures remain an issue in Metro Denver, along with instability in the stock market.
According to Clark, Metro Denver will not see a near-term change in the foreclosure rate. “Metro Denver's high foreclosure rate is a function of changes in the bankruptcy laws, Colorado's slow recovery from the recession, and a continued up-tick in interest rates by the Federal Reserve," explained Clark.
The Monthly Economic Summary provides a snapshot of metro area economic activity, as well as its relationship to national and regional economic trends.