Thursday, March 21, 2013

Unemployment falls year over year in all metros, but some areas head back above 9 percent

Total employment growth in Colorado in January continued at a solid pace during January according to the most recent emploment data 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 January 2013 are:
Colorado Springs, 8.8%
Denver-Aurora, 8.8%
Fort Collins-Loveland, 6.1%
Grand Junction, 9.2%
Greeley, 8.4%
Pueblo, 10.7%
Statewide, 7.5%

Since mid-2009, The Fort Collins-Loveland area has consistently shown one of the lowest unemployment rates while Pueblo's unemployment rate has been above ten percent for over a year now. Over the past year, however, The Colorado Springs unemployment rate has stalled above 8 percent, and the Grand Junction unemployment rate has been heading up since fall 2012.  

All areas have shown declines from January 2012 to January 2013, though. Recent revisions to the employment data also pushed up the January 2012 unemployment rate in most metros from what had been previously reported. 

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 January 2013 employment totals: 

Colorado Springs MSA, 6.4%
Denver-Aurora MSA, 2.9%
Fort Collins-Loveland MSA, 2.8%
Grand Junction MSA, 12.4%
Greeley MSA 3.2%
Pueblo MSA, 3.7%
Statewide, 3.7%

All things being equal, the areas further below the peak have recovered the least from initial job losses.  Grand Junction's total employment has recently dropped further from peak levels, although most other areas, except Pueblo, have shown gains toward peak levels. 

(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 January 2013, the rate in the Boulder-Longmont area was 5.5%.)