Friday, April 5, 2013

Employment in Colorado metro areas: Denver and Colorado Springs unemployment heads downward

Total employment growth in Colorado in February continued at a solid pace during February 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 February 2013 are:
Colorado Springs, 8.7%
Denver-Aurora, 7.4%
Fort Collins-Loveland, 6.5%
Grand Junction, 9.1%
Greeley, 8.7%
Pueblo, 10.6%
Statewide, 7.6%

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 had been heading up since fall 2012, but fell slightly in February.   

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

The unemployment rate ticked up noticably in the Greeley and Ft. Collins-Loveland areas in recent months. This is being at least partially driven by the fact that the Greeley and Ft. Collins areas are seeing some of the biggest growth in total labor force size right now. If labor force growth exceeds employment growth, this will push up the unemployment rate. As the Greeley and Ft. Collins areas have seen some of the most robust job growth in recent months, this has encouraged some local workers to re-enter the work force. 

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 February 2013 employment totals: 

Colorado Springs MSA, 5.7%
Denver-Aurora MSA, 2.4%
Fort Collins-Loveland MSA, 3.8%
Grand Junction MSA, 12.0%
Greeley MSA 3.2%
Pueblo MSA, 3.2%
Statewide, 3.3%

All things being equal, the areas further below the peak have recovered the least from initial job losses.  In general, all areas have shown some movement back toward peak levels in recent months. 

(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 February 2013, the rate in the Boulder-Longmont area was 5.7%.)