Low Unemployment Could Stymie State's Growth
Summit Economics' monthly Colorado indicators reveal the downside of low unemployment
The growth rate of wage and salary employment in Colorado has been slipping slightly in recent months. This begs the question as to whether we see the beginning of a trend toward lower employment growth and, if so, why. Most economists refer to “normal” unemployment rates of between 4 percent and 4.5 percent, which provides low enough unemployment to support a strong economy while enough people are job hunting to support continued hiring by organizations in need of employees. Given the historically low unemployment rate, it appears further employment growth could be significantly hindered in 2018.
The market needs greater growth in the labor force to maintain a good supply of workers. This can come from more adults who have not been working seeking work and/or higher migration into Colorado. The good news is that apartment construction has jumped dramatically which should ease rent pressures and help in attracting more workers to Colorado. The bad news is the State Demographer’s office recently reported lower levels of net in-migration which will slow labor force growth.