Local job market looking up

The Colorado Springs-area job market wasn't nearly as weak as early estimates indicated, state officials said Tuesday after revising last year's local employment growth numbers sharply higher.


The revisions by the Colorado Labor and Employment Department boosted the area's 2007 job-growth rate to 1.13 percent from a previous estimate of 0.69 percent. The department also revised the local jobless rate a bit higher for each of the past two years.


The revisions replace estimates compiled from surveys of employers and residents with data from unemployment insurance reports for the first nine months of the year, the most current available, and then make new estimates for the final three months.


The new numbers paint a conflicting picture of the local job market, with stronger job growth at the same time more people are out of work.


That trend continued in January with the local jobless rate jumping to a 2½-year high of 5.4 percent and job growth surging to 2.2 percent.


"You've had some headline events with layoffs, but the underlying economy is stronger than we were giving it credit for," said Joseph Winter, a department economist. "Things were not quite as dismal as the preliminary numbers had first indicated."


The revisions showed that local job growth slowed dramatically in the first half of 2007 before accelerating in the second half of the year. At the same time, the local unemployment rate has risen from the same month a year earlier for four consecutive months.


None of three economists who follow the local economy had a theory on why job growth and unemployment are increasing at the same time.


"The numbers suggest the nation is already in a recession, but I think that we will tiptoe around a recession," said Fred Crowley, senior economist with the Southern Colorado Economic Forum. "This will be nothing like what happened in the last (national) recession."

In Colorado Springs, retail job growth slowed during the first half of the year then accelerated sharply in the second half. Local job growth last year also was strong in the government, professional services, health care and other services sectors.


Those gains more than offset declines last year in the local manufacturing, financial services and construction industries, though local construction employment has been rebounding in recent months and showed gains in January compared with a year ago.


Construction work to expand Fort Carson to handle twice as many troops as it did five years ago seems to be insulating Colorado Springs from a national slowdown, said Dave Bamberger of Bamberger & Associates, a Springs-based economic research firm.


"The expansion certainly has helped to mitigate the downside of the slump in residential construction," Bamberger said. "We have squeaked through in the last year without feeling a significant bit of pain, but there are some sectors - housing and manufacturing - where the pain is acute."


With statewide numbers, the department made revisions similar to those in the Springs area, reflecting much stronger hiring by retailers than the earlier data indicated, Winter said. Most of the gains came from retailers not included in the state's surveys, mostly small and Colorado-based merchants.


"Many merchants didn't cut back staff in January 2007 like they normally would" because two December 2006 snowstorms delayed holiday shopping for many, Winter said. Retailers added staff to handle crowds last summer and during the 2007 holiday shopping season.


Statewide, the unemployment rate in January rose to 4.2 percent, the highest level since October 2006, from 4 percent in December. Statewide job growth fell to 2 percent, the lowest rate in nearly a year, while employment was declining nationally.


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