Trends

Colorado continues to recover from the COVID-19 pandemic in terms of job growth and other economic indicators, according to the latest findings in a quarterly report. But challenges remain, among them rising inflation.

“Like many Americans, Coloradans are experiencing high inflation and rising prices for goods and services. These are challenging times for working families making tough choices between filling up the tank, paying bills and putting food on the table. And Colorado business owners must contend with the rising cost of operating expenses,” said Jena Griswold, Colorado secretary of state.

Rich Wobbekind, senior economist and faculty director of the Leeds Business Research Division at the University of Colorado at Boulder, agreed. “Colorado business leaders cited inflation as one of their top concerns in the latest business confidence index.”

The Leeds Business Research Division compiles a quarterly business and economic indicators report in conjunction with the Colorado Secretary of State’s office.

According to the report for the first quarter of 2022, Colorado added 389,400 jobs between May 2020 and March 2022, exceeding the 375,200 jobs lost between February and April 2020 because of the pandemic and related restrictions.

Nonfarm payrolls increased 131,200 between March 2021 and March 2022, a gain of 4.9 percent.

The labor force participation rate — the share of the population working or looking for work — stood at 68.7 percent in February, third highest nationally. The statewide seasonally adjusted unemployment rate slipped three-tenths of a point in March, but at 3.7 percent remained above the national jobless rate of 3.6 percent for April.

Gross domestic product, the broad measure of goods and

May 12-25, 2022 The Business Times News Page 19 Trends

INDICATORS AT A GLANCE n Business filings Contributors Colorado recovery continues t New business filings in Colorado, 43,780 in the first quarter, down 2.1 percent from the first quarter of 2021. services produced in the state, increased 6.3 percent between the fourth quarters of 2020 and 2021.Opinion But rising inflation presents challenges, quarterly report confirms n Confidence t Consumer Confidence Index 107.3 for April, down 0.3. t Leeds Business Confidence A total of 43,780 new business filings were recorded during the first quarter of 2022. That’s up 22.9 percent from the fourth quarter, but down 2.1 percent from the first quarter of 2021. For the 12-month period ending in March 2022, 156,865 new filings were recorded. That’s up 5.1 percent over the same span a year ago. New filings Business Briefs Business People Index for Colorado, 53.9 for the second quarter, down 4.1 n National Federation of Independent Business Small constitute a leading indicator of subsequent business and job growth. A total of 191,846 renewals for existing entities were recorded in the first quarter of 2022. That’s an increase of 15.3 percent over the fourth quarter 2021 and 10.3 percent over the first quarter of 2021. Almanac Business Optimism Index A total of 675,536 renewals were recorded in the 12-month period 93.2 for April, unchanged. ending in March 2022, an 8.1 percent increase over the span last year. n Foreclosures Jena Griswold At the same time, the Consumer Price Index in the DenverAurora-Lakewood region increased 9.1 percent in March s Foreclosure filings in Mesa County, 24 in April, up from 4 in April 2021. compared to the same month last year. That exceeds the 8.5 percent year-over-year gain nationwide. Core inflation rose 8 percent in Colorado compared to 6.5 percent nationally. Home price growth in the state increased 18.2 percent on a t Foreclosure sales in Mesa County, 0 in April, down from 4 in April 2021. year-over-year basis in the fourth quarter of 2021. Monthly retail gasoline prices in Colorado increased 32.9 percent year-over-year in April, reaching $4.04 per gallon. More concerned about inflation, supply chain issues and n Indexes t Conference Board Employment Rich Wobbekind international conflicts, Colorado business leaders were less optimistic heading into the second quarter. The Leeds Business Trends Index, 120.18 for Confidence Index dropped to 53.9. That’s 4.1 points lower than April, down 0.6. the reading for the first quarter and 10.5 points lower than the s Conference Board Leading reading for the second quarter of 2021. The reading for the third Economic Index 119.8 for quarter of 2022 slipped further to 53.3. Readings above 50 reflect March, up 0.3%. more positive than negative responses, however. t Institute for Supply Management “The good news is that Colorado’s economy is in recovery mode,” Purchasing Managers Index Griswold said. “The state’s job recovery is above pre-recession levels, for manufacturing, 57.1% for and our labor force participation rate ranked third-highest in the April, down 1.2%. nation in February. We must continue to do all we can to support n Lodging Colorado’s small businesses and the working families that are the backbone of our economy and communities.” s Lodging tax collections in F Grand Junction, $226,835 for March, up 58.7% from March 2021. n Real estate Small business index reflects inflation concerns

t Real estate transactions in Mesa County, 448 in April, down 7.1% from April 2021. s Dollar volume of real estate transactions in Mesa County, $197 million in April, up 6.5% from April 2021. n Sales

s Sales and use tax collections in Grand Junction, $5 million for March, up 13% from March 2021. s Sales and use tax collections in Mesa County, $3.7 million for March, up 18% from March 2021. n Unemployment

t Mesa County — 3.9% for March, down 0.6.

t Colorado — 3.7% for March, down 0.3. n United States — 3.6% for April, unchanged.

A measure of optimism among small business owners remains unchanged as concerns persist over inflation and labor shortages.

The National Federation of Independent Business reported its Small Business Optimism Index held steady at 93.2 in April. The index has remained below its 48-year average reading of 98 for four straight months.

“Small business owners are struggling to deal with inflation pressures,” said Bill Dunkelberg, chief economist of the NFIB. “The labor supply is not responding strongly to small businesses’ high wage offers, and the impact of inflation has significantly disrupted business operations.”

The small business advocacy group bases the index on the results of monthly surveys of members, most of them small business owners. Five of 10 components of the index retreated between March and April while two advanced and three remained unchanged.

The proportion of NFIB members who responded to the survey upon which the April index was based who expect the economy to improve over the next six months fell a point. At a net negative 50 percent, the lowest level ever for the index, more respondents anticipated worsening conditions.

A net 27 percent of respondents reported plans for capital outlays in coming months, up a point. Only a net 4 percent said

they consider now a good time to expand, down two points. A net 20 percent of respondents reported plans to increase staffing, unchanged from March. Meanwhile, 47 percent reported unfilled job openings, also unchanged. Asked to identify their most important business problem, 32 percent cited inflation. That’s up 26 points from a year ago to the highest level since 1980. Another 23 percent cited the quality of labor as their most pressing problem. A net 70 percent reported raising average sales prices, two points below a record level in March. A net 46 percent reported raising compensation, down three points. A net 27 percent plan to Bill Dunkelberg raise compensation in the next three months. The proportion of survey respondents who said they expect higher sales volume rose six points. But at a net negative 12 percent, more anticipated lower volume. The share of those reporting higher earnings remained unchanged. But at a net negative 17 percent, more respondents reported lower earnings. Among those who did, 34 percent blamed rising materials costs and 22 percent cited weaker sales. A net 1 percent of respondent reported plans to increase inventories, down a point. A net 6 percent said existing inventories were too low, down three points. Meanwhile, 36 percent of those who responded to the survey said supply chain disruptions have had significant effects on their businesses and 34 percent reported moderate effects. F

As U.S. payrolls increase, jobless rate holds steady

Job growth continues to accelerate in the United States as the unemployment rate holds steady.

Nonfarm payrolls increased 428,000 in April and the jobless rate remained unchanged at 3.6 percent, according to the latest U.S. Bureau of Labor Statistics estimates.

Labor participation remains below the February 2020 level, however, and the onset of the COVID-19 pandemic in the U.S.

Estimated payroll gains for March and February were revised downward a total of 39,000 to 428,000 and 714,000, respectively.

For April, 5.9 million people were counted among those unsuccessfully looking for work. Of those, 1.5 million have been out of work 27 weeks or longer.

Another 4 million people were counted among those working part-time because their hours were cut or they were unable to find full-time positions.

The labor force participation rate — the share of the population working or looking for work — fell to 62.2 percent, the lowest level in three months.

Payroll gains in April were spread out among a number of industry sectors. Employment increased 78,000 in leisure and hospitality, 55,000 in manufacturing, 52,000 in transportation and warehousing, 41,000 in professional and business services, 35,000 in financial activities, 34,000 in health care, 29,000 in retail trades and 22,000 in wholesale trades.

The average workweek for employees on private, nonfarm payrolls remained unchanged at 34.6 hours. The average manufacturing work week shortened two-tenths of an hour to 40.5 hours.

Average hourly earnings for employees on nonfarm payrolls rose 10 cents to $31.85. Over the past year, average hourly earnings have increased 5.5 percent.

Labor index slips

An index tracking labor trends in the United States has slipped, but continues to signal job growth in the months ahead.

The Conference Board reported its Employment Trends Index fell six-tenths of a point to 120.18 in April.

Agron Nicaj, an associate economist at the Conference Board, said the index indicates the labor market is still expanding, but the pace of growth could slow. The U.S. unemployment rate could retreat to 3 percent by the end of the year, Nicaj said.

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Index: Consumers less upbeat

A measure of consumer confidence has slipped on less optimistic assessments of business and labor conditions. The Conference Board reported its Consumer Confidence Index edged down three-tenths of a point to 107.3 in April. A component of the index tracking current conditions retreated even as a component tracking short-term expectations advanced. Lynn Franco, senior director of economic indicators at the Conference Board, said the latest results suggest the United States economy continued to expand early in the second quarter. “Expectations, while still weak, didn’t deteriorate further amid high prices, especially at the gas pump, and the war Lynn Franco in Ukraine,” Franco said. “Vacation intentions cooled, but intentions to buy big ticket items like automobiles and many appliances rose somewhat.”

The New York-based think tank bases the index on the results of monthly household surveys. Economists monitor the index because consumer spending accounts for more than two-thirds of economic activity

Less upbeat assessments pulled down the present situation component of the index 1.2 points to 152.6.

The proportion of consumers responding to the survey upon which the April index was based who described business conditions as “good” climbed 1.2 points to 20.8 percent. The share of those who said conditions were “bad” rose a half point to 21.9 percent.

The proportion of consumers who said jobs were “plentiful” declined 1.5 points to 55.2 percent. The share of those who said jobs were “hard to get” rose a point to 10.6 percent.

More upbeat outlooks pushed up the expectations component of the index a half point to 77.2.

The share of consumers who said they expected business conditions to improve over the next six months fell nine-tenths of a point to 18.1 percent. But the proportion of those anticipating worsening conditions fell more — 2.3 points to 21.8 percent.

The share of those who said they expected more jobs to become available in coming months edged down two-tenths of a point to 17.4 percent. The proportion of those who anticipate fewer jobs rose nine-tenths of a point to 18.9 percent. F

Leading Economic Index signals growth despite challenges

An index forecasting economic conditions in the United States continues to increase, signaling growth in the months ahead despite the war in Ukraine and other challenges.

The Conference Board reported its Leading Economic Index rose three-tenths of a percent to 119.8 in March. The index rose 1.9 percent over the past six months. Ataman Ozyildirim

Separate measures of current and past performance also increased in March.

“This broad-based improvement signals economic growth is likely to continue through 2022 despite volatile stock prices and weakening business and consumer expectations,” said Ataman Ozyildirim, senior director of economic research at the Conference Board.

Gross domestic product, the broad measure of goods and services produced in the country, is expected to grow 3 percent on a year-over-year basis in 2022, the New York-based think tank projected. That’s slower than the 5.6 percent gain in 2021, but still above the trend before the COVID-19 pandemic.

“Downside risks to the growth outlook remain, associated with intensification of supply chain disruptions and inflation linked to lingering pandemic shutdowns and the war, as well as with tightening monetary policy and persistent labor shortages,” Ozyildirim said.

In a media briefing in April, the Conference Board detailed its expectations the war in Ukraine will exert enduring economic effects across the world.

In the United States, a year-over-year decline in GDP of three-tenths of a percent to eight-tenths of a percent is estimated. Bigger declines are forecast for France, Germany, Italy and other European countries.

Inflationary pressures are expected to mount around the globe. The estimated range of year-over-year change in Consumer Price Index inflation ranges from eight-tenths of a percent to 3 percent worldwide.

The Coincident Economic Index rose four-tenths of a percent to 108.7 in March. The index increased 2.2 percent over the previous six months. The Lagging Economic Index increased six-tenths of a percent to 110.9 in March. The index has increased 2 percent over the past six months. F