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For the first time since the pandemic, employment growth in the state lagged behind U.S.

February 21, 2024

2 Min Read
Colorado.USDA ARS

Colorado’s economy appears poised to modestly gain momentum through the first half of 2024, according to the latest ColoradoCast from the Colorado Futures Center at Colorado State University. However, for the first time since the COVID-19 pandemic began, employment growth in the state lagged behind the U.S. overall.

“I am cautiously watching changes in forecast drivers and employment conditions which are resulting in Colorado’s economic growth lagging behind other states and the nation overall,” said Phyllis Resnick, the executive director and lead economist of the Colorado Futures Center.

Colorado’s employment growth in 2023 and a slight weakening of local economic drivers, particularly housing, resulted in a first-quarter 2024 ColoradoCast that, while remaining positive, is more modest than national expectations.

The model shows the Colorado economy is continuing to avert recession and sustaining an average annual rate growth of 2%.

Additional economic indicators are either positive or neutral, with national drivers of equity and bond markets providing the most growth nationally.

In Colorado, housing experienced a slight correction at the end of 2023 that the ColoradoCast said appears to be reversing – and if it continues to regain momentum into this year, would help the state’s economic outlook continue to regain strength.

“Consistent with each ColoradoCast in the post-pandemic economy, this forecast continues to show the Colorado economy maintaining growth, albeit modestly,” Resnick said. “However, in this and the previous ColoradoCast, the growth is driven largely by national indicators and less by local ones.” 

The full report is available on the ColoradoCast page of the Colorado Futures Center website.

About the ColoradoCast

The ColoradoCast is a short-term (approximately six months ahead) economic forecast for the Colorado economy developed by the Colorado Futures Center, a 501c3 organization dedicated to informing about economic, fiscal and public policy issues impacting community economic health and quality of life. It is designed to forecast a well-known contemporaneous measure of statewide economic activity, the Coincident Economic Activity Index for Colorado, developed by the Federal Reserve Bank of Philadelphia. The Coincident Economic Activity Index includes four indicators: nonfarm payroll employment, the unemployment rate, average hours worked in manufacturing and wages and salaries. The trend for the index is set to match the trend for gross state product.

The ColoradoCast predicts the value and annualized growth rate in the coincident index using six factors: the yield curve measured by the spread between two- and 1o-month treasuries, the risk spread between high-quality corporate and 10-year treasury returns, employment in the employment services sector, home prices as measured by the Case-Shiller index for Denver, initial claims for unemployment insurance, and the value of the Wilshire 5000 stock index. The ColoradoCast is released quarterly and fills within economic forecasts and the importance of understanding short-term economic projections to businesses.

Source: Colorado State University

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