Back and forth recession fears continue

CLASSIFIEDS

University of Colorado economists weigh in

BY TAMARA CHUANG THE COLORADO SUN

Even as the number of Coloradans ling to start a new business hit a new high this year, a “light” recession may come sooner than later, said economists from the University of Colorado during the Secretary of State’s quarterly economic update this month.

It was a week, after all, where another bank failed and the Federal Reserve increased interest rates. And it followed a recent report that the nation’s economic growth saw a signi cant slowdown in the rst quarter.

“It’s already increasing lending standards and it’s requiring the banks to be more cautious about making loans,” said Richard Wobbekind, senior economist and faculty director at the Business Research Division at CU’s Leeds School of Business. “ at could really slow down small business in particular given the types of banks we’re talking about.” e Leeds economists have been hinting at a recession for several quarters but were pinning it to the

A bright spot? Consumer spending. It grew at an annual rate of 3.7%, which was better than the fourth quarter growth of 1%.

“ at’s notable because there are rates,” Lewandowski said. “ ese are all things that should logically point to a slowdown in consumption. But, in fact, rst quarter consumption came in pretty strong.”

Next up is jobs and whether the slowing job growth in Colorado will improve. e state’s lagging job growth rate of 1.2% last year ranked Colorado as the second slowest state nationwide, behind West Virginia.

But the state Department of Labor and Employment said the number was likely undercounted and revisions of 17,400 are expected. at would improve Colorado’s outlook but still put the state around a 2% job growth rate last year, ranking it around 39th or 40th in the nation, Lewandowski said.

“A lot of this rests on hiring nationally,” he said. “I think what keeps us between slow growth and light recession is the pace of job growth.” e number of job openings in the state translates to 2.4 job openings for every unemployed Coloradan.

UCCS outlook on recession: Yes, no, maybe?

Translating economic data seems like a Sisyphean task and one that is most accurate in retrospect. Economist Joe Craig addressed the topic earlier this week during a public meeting for the University of Colorado Colorado Springs Economic Forum, where he serves as interim director.

“People always ask, ‘Are we going into recession?’” Craig said. “Maybe? Probably? I don’t know. If you guys have been paying attention to my dashboard, I swear I switch every month.” e important thing, he said, is

“Do you feel like you’re in a recession if you’re still employed and you can still meet all of your bills? Probably not,” he said. “A lot of what life is about is how do you feel about it? If you have a job, if you’re working, if you’re not worried about being evicted next month, even if you are in a recession, I’d argue that most people are OK with that situation. Maybe they’re not happy. ey’re not taking all the vacations they want to take, but they’re still employed.”

El Paso County had a 2.8% unemployment rate in March, which he called “crazy low.” Unemployment rates are pretty low all over the place, including Colorado’s 2.8% and the U.S. at 3.6%. at’s showing that even though wages are up, it’s still hard for employers to hire, he said. Hence, the back and forth with the recession since more jobs show growth.

For now, data from the Pikes Peak Workforce Center is showing that there are 43,000 job openings compared to 10,000 unemployed workers in Colorado Springs. at’s four jobs for every unemployed worker. It’s the skills mismatch that causes the disconnect, so that’s why job training is a priority at the workforce center.

In Colorado Springs, the top types of job openings were registered nurses, software developers and computer workers.

“ ere’s a skills mismatch, and that’s a problem,” he said. “ e upside is we do have people who want jobs.” is story is from e Colorado Sun, a journalist-owned news outlet based in Denver and covering the state. For more, and to support e Colorado Sun, visit coloradosun.com. e Colorado Sun is a partner in the Colorado News Conservancy, owner of Colorado Community Media