Economists: Colorado economy resilient in face of headwinds

DENVER — A year ago, many experts thought the Colorado economy would be contracting right now. 

However, despite persistent headwinds and nagging concerns, the Centennial state is poised for growth, albeit modest, heading into 2024, University of Colorado economists said at the Colorado Business Economic Outlook Forum held Monday in Denver. 

The Colorado Business Economic Outlook, released annually by CU for the past 59 years, projects that the state will add 41,900 jobs in 2024, a 1.4% increase over the 2023 worker total. 

“The employment growth has been impressive” given challenges such as inflation, high interest rates and the tight labor market, said Rich Wobbekind, faculty director and senior economist at the Business Research Division at CU’s Leeds School of Business. But growth, he said, is certainly slowing as compared to the post-pandemic recovery period. 

“This has been an incredibly impressive recovery” over the past several years since the economy bottomed out during the brief COVID-19 recession, Wobbekind said.

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But despite the temperate optimism, experts are hardly cheering. “At best these are definitely mixed signals,” Wobbekind said of the data and insights gathered to write the Colorado Business Economic Outlook report.

Inflation, while down year-over-year, continues to outpace the nation in Colorado’s population centers along the Front Range. “Prices for all items in the Denver-Aurora-Lakewood region rose 5.4% in September, down from 7.7% in September 2022,” according to the report. 

All eyes will be on the Federal Reserve in 2024, as “the health of the economy will be intrinsically linked with the Federal Funds interest rate,” the report said, a rate that has been raised time and again in recent years in an effort to tame inflation. 

“Retail sales declined 0.1% in October, the first decline since March,” according to the outlook, a concerning portent for the overall health of the economy.

Part of the reason why Colorado’s job-growth figures aren’t better heading into 2024 is the state simply doesn’t have the bodies to fill open positions.

“It’s a conundrum that we all need to talk about,” Colorado State Demographer Elizabeth Garner said. There is a need for more workers, but many factors — housing affordability topping the list — make Colorado a challenging place for workers to relocate. 

Still, “job growth drives net migration,” she said, and the workers who do come to Colorado are most likely to settle along the Front Range, where most of the available positions are located.

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