Cuts at Fort Carson lead to reduction in job growth forecast

The Southern Colorado Economic Forum is reducing its job growth forecast slightly as a result of civilian job cuts at Fort Carson, said Tom Zwirlein, the forum’s director, during Vectra Bank Colorado’s economic forecast breakfast Thursday.

Civilian job cuts totaling nearly 140 at Fort Carson that include 61 layoffs later this week and 78 seasonal jobs that won’t be filled this summer come just months after the post added thousands of soldiers from units that had been at Fort Hood in Texas.

The forum previously forecast that local employment would grow by 1.2 percent this year, in part because of the boost the additional troops and expected growth in the civilian work force was expected to give the local economy.

Zwirlein said the cuts prompted him to reduce his job growth forecast for this year to between 1 percent and 1.1 percent, from an already weak level that reflected a slow recovery from more than 10,000 local job losses last year. The forum estimated that local civilian employment, excluding the self-employed, declined last year by a record of more than 3.5 percent amid a deep recession that pushed the local unemployment rate above 8 percent.

While the nation’s and Springs area’s economies are recovering from the financial crisis that triggered the worst economic downturn in nearly three decades, another forum speaker warned that the nation remains in the midst of a debt crisis that will last for years. George Feiger, CEO of Contango Capital Advisers, a subsidiary of Vectra parent Zions Bancorporation, said debt levels have grown by more than a third in the past 10 years as a percentage of economic output.

“This mountain of debt has to be repaid or defaulted on, and even a small increase in interest rates will make the burden of repaying that debt unbearable,” Feiger said. “Consumption will have to be lower and people will have to save more to pay off this debt.”

Since consumer spending now makes up nearly three fourths of the nation’s economy, Feiger said reducing such spending would be felt across many sectors of the economy. He also said he expects both residential and commercial property values to keep falling as a result of mounting loan foreclosures.