Colorado recession watch
In February, the Colorado economy saw another bump in unemployment and a nominal increase in overall employment. The job gap continued to grow, construction employment remained constant, and the recession dragged on.
While there is reason to hope the recession will soon be over, for the average Coloradan the pain continues unabated. Demand for food stamps and state-provided healthcare continues to grow.
In February state unemployment continued its second bump upward since the beginning of the recession, ending at 7.7 percent. Although this rate is quite high, Colorado continues to stay well under the national rate and has the 15th lowest state unemployment rate in the nation, along with the 12th lowest recessionary increase in unemployment. While dismaying, this bump may actually be a sign the recession is ending. Because of the design of the survey on which unemployment figures are based, only workers actively looking for work are counted as unemployed.
Thus the upward trend since December may show workers are feeling more encouraged and resuming an active search for employment. However, the true mark of economic recovery will be these workers actually finding jobs.
While the U.S. economy began shedding jobs as soon as the recession began in December of 2007, revised figures show the Colorado economy did not experience an overall decrease in employment until six months later in June 2008. Yet once losses began, the decline was dramatic. From peak employment in May 2008, the Colorado economy has lost 155,100 jobs. While severe, these losses are on par with national trends. Colorado’s job losses as a percentage of the labor force rank 23rd highest among other states. Recently, the economic downturn seems to have bottomed out. Job losses have slowed, and from December 2009 to February 2010 overall state employment has been effectively constant.
A look at the current recession alongside the three previous recessions reveals the unusual depth and duration of the current recession. No recession since the Great Depression has been as long or as severe as the current one, which had lasted 26 months as of February 2010 and saw a 4 percent increase in unemployment at its peak.
The construction sector has taken a huge hit during the Great Recession, losing close to one-third of total employment since the recession began. In February there was no change in Colorado construction employment.
Job shortfall is a metric to help put changes in the size of the labor market in context. It measures the difference between actual employment and what employment would need to be to keep up with population growth. In February 2010, the Colorado job shortfall stood at 223,233 jobs.
Medicaid and CHP+
During the recession Colorado has seen consistent and substantial caseload growth in Medicaid and the Children’s Basic Health Program (CHP+), programs that provide medical care for low income residents and children, respectively. Since the start of the recession, the total combined caseload of these two programs has increased 29 percent. During this period, the state population grew about 3.4 percent. Thus, since the start of the recession, combined Medicaid and CHP+ caseload grew roughly eight times faster than the state population. This explosive growth rate in caseload underscores the economic hardship for many Coloradans, who are forced to rely on the state for medical support in staggering numbers as the recession drags on.
The recession has also created a substantial need for the nutritional assistance provided by the U.S. Departments of Agriculture’s Supplemental Nutritional Assistance Program (SNAP). In December 2009, 390,656 Coloradans received food stamps, up 58 percent since the recession began.
The path to recovery
Colorado might be turning the corner toward recovery, but the effects of the Great Recession reverberate throughout the state. Since December, the downturn has produced a second wave of high unemployment and stagnant employment. As a result Colorado continues to struggle with a growing job shortfall and a huge demand for nutritional and medical assistance.