Thursday, December 27, 2012

Unemployment increases in Colorado Springs and Pueblo, flat or falling elsewhere

Total employment growth in Colorado in November was flat according to the Household Survey and showed some growth in the payroll totals. In Colorado, total employment in Colorado was down 123,000 from the July 2008 peak. Employment trends in various regions of the state differ, however, so this article looks at which regions of the state have the highest unemployment rates, and which regions have recovered the most in their labor markets. 

Regional employment trends can also provide us with some insights into local housing demand since, all things being equal, those areas with the most robust labor demand will also have the strongest demand for housing. This would be reflected in apartment vacancy rates and in median home price and home sales transactions, among other indicators. 

The first graph compares unemployment rates in Colorado's metro areas.

The regional unemployment rates (not seasonally adjusted) for November 2012 are:
Colorado Springs, 8.8%
Denver-Aurora, 7.4%
Fort Collins-Loveland, 6.0%
Grand Junction, 8.4%
Greeley, 8.2%
Pueblo, 10.1%
Statewide, 7.5%

Since mid-2009, The Fort Collins-Loveland area has consistently shown one of the lowest unemployment rates while Grand Junction and Pueblo have generally shown the highest rates. During recent months, however, The Colorado Springs are has moved into second place behind Pueblo for the highest unemployment rate while Grand Junction has fallen again.  

The unemployment rate was flat or decreased in all metro areas except Colorado Springs and Pueblo from November 2011 to November 2012.  In Colorado Springs, the unemployment rates increased from 8.6 percent to 8.8 percent over the period, and in Pueblo, the rate increased from 9.6 percent to 10.1 percent in Pueblo. The unemployment rate was flat, year over year, in Denver-Aurora and Grand Junction. 

To provide some additional context, we can look to see how far below total employment levels are below the most recent peak in employment in each region. The peak time differs in each region. For example, the labor market peaked in mid-2007 in the Colorado Springs area, but it did not peak until late 2008 in the Grand Junction area. 

The following numbers reflect how far below the most recent peak are the November 2012 employment totals: 

Colorado Springs MSA, 8.6%
Denver-Aurora MSA, 3.5%
Fort Collins-Loveland MSA, 2.3%
Grand Junction MSA, 9.1%
Greeley MSA 4.1%
Pueblo MSA, 2.1%
Statewide, 4.6%

All things being equal, the areas further below the peak have recovered the least from initial job losses. The noticeable exception is Pueblo where total employment is nearly back to peak levels, but the unemployment rate is being kept up by a growing labor force that is unable to find employment. Most other regions are experiencing very little growth in labor force, or even declines. See here for more on Pueblo. 

Grand Junction is further below peak levels than all other metros, including Colorado Springs, although both those metros have consistently well below peak levels in recent months. We see here also that the Ft. Collins-Loveland area has one of the strongest markets, with Greeley also moving toward peak levels. Northern Colorado continues to show signs of significant job growth. 

(Note: If we include the Boulder-Longmont MSA, we find that the Boulder area has consistently been among the areas with the lowest unemployment rate. In November 2012, the rate in the Boulder-Longmont area was 5.7%.)