Business/Technology Reporter
As investors dealt with stock market chaos triggered by last week’s weak U.S. job report, local economists who track the job market noted nearly the same thing: the response was overblown.
“I think the initial market response wasn’t really justified by the U.S. jobs report — the increase in the unemployment rate was driven by more job-seekers, not a decrease in the number of people who are working,” said Bill Craighead, executive director of the University of Colorado Colorado Springs Economic Forum.
The national report was underwhelming as the U.S. unemployment rate in July rose to 4.3%, more than a half a percentage point from its low in the past year. That’s the trigger for a recession, according to the so-called Sahm Rule, named for the former Fed economist Claudia Sahm. The rule says that by the time there’s been a half-point rise, “a recession is almost always already underway,” though Sahm said last week a recession isn’t imminent, AP reported.
Colorado’s July numbers should be out next week. The state’s June unemployment rate was 3.8%, the same as May, but already past the Sahm Rule since the jobless rate was 3.2% in July 2023. Monthly reports are preliminary though and tend to get revised.
Colorado has also seen a job-growth slowdown this year, but that’s been expected. Much of the rapid growth in the past three years was about recovering jobs lost in the first two months of the pandemic. The state’s back to where it was before the pandemic and still seeing some growth.
“These job growth numbers have a large margin of error. So most any reaction done to the numbers is an overreaction,” said Jeffrey Zax, an economics professor and associate chair of the undergraduate Department of Economics at University of Colorado Boulder. “And these numbers get revised. … My belief is that the stock market, as you can see from this past week, sometimes responds with great volatility to the initial reports. They don’t respond to the corrections.”
On Friday, the U.S. stock market was up again. The S&P 500, which had plummeted 3% on Monday, recovered most of Monday’s losses by Friday’s close.
The 30-year fixed mortgage rate has fallen to 6.54%, about where it was two years ago, according to Mortgage News Daily.
Colorado’s labor market is still considered tight, even just below 4%. If employers can’t find enough people to fill job openings, the business either increases wages or adjusts operations to rely on fewer employees. But that can limit the company’s own growth.
“Remember,” Zax added, “job growth is only one piece of the equation. If everybody’s already got a job then jobs grow even further, that’s certainly good for workers. It makes their wages go up. But it’s not great for businesses because that means that their costs are going up as well.”
The 3.8% unemployment rate in June translates to 124,400 unemployed Coloradans looking for a job compared with 3.1 million who have one. Back in June 2015 when the state’s rate was again at 3.8%, there were 106,790 unemployed workers looking for work compared with 2.7 million people who had a job.
Craighead said he also looks at who is working. In the 25-to-54-year-old age group — considered the “prime working age” of the employment population — 80.9% of the U.S. population is employed, “the highest since 2001,” he said, though he pointed out that June and July 2023 also hit 80.9%.
Colorado’s rate was 84.3% in the 12-months ending in June, according to state Department of Labor and Employment data. It had dropped to 79.9% in 2020 during the pandemic.
He’s “cautiously optimistic” that we’ll avoid a recession, but that may depend on the Federal Reserve deciding how fast to cut interest rates.
“That said, there are still definite signs of the national labor market cooling, with slowing wage growth and fewer job openings,” Craighead said. “While that was needed to some extent, you don’t want it to go too far. I think it’s also pretty clear that inflation is under control. So, I think the Fed missed an opportunity by not cutting rates.”
More Colorado job news:
➔ Unemployment claims: Approximately, 2,785 Coloradans filed an initial claim for unemployment during the week ended Aug. 3, or 60 more than a week prior. That compared with a weekly average of 1,900 in 2019. Continued claims, which are approved initial claims, grew by 998 to 28,155 for the week ended July 27, according to the U.S. Department of Labor. In 2019, continued claims averaged 18,600 a week.
➔ Where have Colorado’s construction workers gone? The state lost 4,200 construction jobs between June 2023 to June 2024. Denver economist Ryan Gedney wondered why in his The Stat Guy newsletter. One possible reason: Colorado wages are pretty high compared with other states (sixth-highest among private employers), but when it comes to average construction pay, we’re ranked 15th or 16th. The state’s median pay for construction work ranked 19th. >> Read
➔ TIAA gives 1,000 workers a 2-year heads up that it’s leaving Denver. Financial services company TIAA told its employees Tuesday that it’s moving the operation to its headquarters in Frisco, Texas, The Denver Post reported first. In an email to The Colorado Sun, TIAA spokesman Mike Tetuan said the lease for part of the 36-story building on Broadway ends in 2029, so vacating in 2026 “will provide substantial savings in rent and operational costs — savings which TIAA can then invest in business needs and serve the best interests of our clients.” He didn’t answer a question about whether savings would be even greater if they moved out earlier, but added that this gives employees a two-year heads-up. Most roles will move to Texas and “with associates having the option to relocate,” he said.
➔ Larimer County’s mental health center lays off 75 people, blames rise in uninsured and Medicaid reform. Three of Colorado’s community mental health centers have laid off employees this summer. >> Read story
Sun economy stories you may have missed
➔ All the new minimum wages in Colorado that kick in Jan. 1. Here’s why they go up every year in Denver, Boulder County, Edgewater and the whole state of Colorado. >> Read story
➔ Plan to drill 166 wells near Aurora Reservoir OK’d with requirement to use cleaner, quieter electric equipment. Lowry Ranch neighbors aren’t ending the fight, saying they will pressure Colorado regulators on safety, noise and wildlife disturbances as the individual drilling sites are considered. >> Read story
➔ Colorado once again breaks tourism records with 31% increase in travelers in the last decade. Colorado hosted 93.3 million visitors who spent $28.3 billion in 2023. Spending by tourists supported 188,000 jobs and generated $1.8 billion in state and local tax revenue in 2023. >> Read story
➔ Colorado resort communities want to impose a vacancy tax on unoccupied homes. The legislative agenda for the Colorado Association of Ski Towns includes a first-ever vacancy tax as well as a real estate transfer fee on all property sales to help fund affordable housing. >> Read story
➔ A Denver pediatrician helped make some of the biggest pandemic vaccine decisions. Here’s what he thinks now. Dr. Matthew Daley ended his term on the Advisory Committee on Immunization Practices in June. The committee makes recommendations about whether and how vaccines should be given. >> Read story
➔ Births in metro Denver are falling faster than much of the country. Here’s what it means for the future. >> Read story
Wish there was more coverage of Colorado’s economy? Support the Sun!
Other working bits
➔ More Colorado locations eligible for broadband funding. After challenges were made, the National Telecommunications and Information Administration gave its final approval to Colorado locations eligible for broadband investment. That means internet providers hoping to tackle the infrastructure in those communities can start making plans and ultimately, pitch the Colorado Broadband Office. See the list here. The state received $826.5 million in federal funding for the Broadband Equity, Access and Deployment Program, which was part of the Infrastructure Act, passed by Congress in 2021. >> Details
➔ The $600-per-classroom grant gets 9,000 applicants. But Colorado can only fund 5,000 of them, according to the Governor’s Office, which earlier this week announced $2.7 million was available for Colorado educators to buy supplies for their classrooms. The program, in partnership with DonorsChoose, had 9,000 projects submitted in the first 24 hours. What the state can’t cover will be funded by the DonorsChoose network of individuals and corporate partners. >> Details
➔ Denver janitors agree on new contract. Pushing negotiations to the nearly the end of their contract, janitors who clean 1,500 buildings in the Denver metro area came to a tentative agreement with their employers. The new contract provides “historic wage increases of 16% to 18% across the Denver Metro,” as well as guaranteed paid sick leave and workplace safety protections, according to union organizers at Service Employees International Union Local 105. >> Details
Got some economic news or business bits Coloradans should know? Tell us: cosun.co/heyww
Thanks for sticking with me for this week’s report. Remember to check out The Sun’s daily coverage online. As always, share your 2 cents on how the economy is keeping you down or helping you up at cosun.co/heyww. ~ tamara
Note: This story was updated at 8:19 a.m. on August 10, 2024 to clarify the labor force participation rate of U.S. and Colorado workers between ages 25 to 54.
Miss a column? Catch up:
What’s Working is a Colorado Sun column about surviving in today’s economy. Email tamara@coloradosun.com with stories, tips or questions. Read the archive, ask a question at cosun.co/heyww and don’t miss the next one by signing up at coloradosun.com/getww.
Support this free newsletter and become a Colorado Sun member: coloradosun.com/join
The Colorado Sun is part of The Trust Project. Read our policies.
Corrections & Clarifications
Notice something wrong? The Colorado Sun has an ethical responsibility to fix all factual errors. Request a correction by emailing corrections@coloradosun.com.