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Inflation in Colorado cools but remains higher than national average in third quarter

Posted at 8:03 PM, Oct 24, 2023
and last updated 2023-10-25 09:30:19-04

BOULDER, Colo. — The Colorado Secretary of State's Office and the CU Leeds School of Business released their 2023 3rdQuarter Business and Economic Indicators report, finding both "extraordinarily strong" job growth and "surprisingly strong" GDP growth, but also continued inflation in Colorado's economy.

As with most economic reports in recent years, the third quarter findings present a mixed bag of both positive and negative economic indicators, a sign of the historic global factors at play. Here are a few key takeaways from the report.

Takeaway 1: The job market is strong

Job growth remains very strong, especially in Colorado. For every one Coloradan currently looking for a job, there are 1.9 job openings in the state. The report refers to this as a "supply-demand imbalance," which is higher in Colorado than the nation as a whole.

"Colorado's labor force participation ranked fourth highest in the nation in August, and grew two percent year over year," Secretary of State Jena Griswold said during a media event held at the University of Colorado.

On the flipside, however, CU researchers pointed out that most of the job growth has been seen in lower-waged jobs. While we are now seeing rising wages, it comes after a period of historic inflation.

Takeaway 2: Inflation is stubborn, but falling

Third quarter findings show continued movement in the right direction regarding inflation, with price increases below 4% for four consecutive months through September of this year. For context, it was reported above 8% last year.

Still, current inflation is above the Federal Reserve's goal inflation rate of 2 percent, and Colorado remains much higher than the national average, with the cost of housing being a key driver. Concerns remain for what continued high prices will mean for people in Colorado and businesses that rely on consumers feeling confident about future economic conditions.

"The Consumer Price Index for the Denver-Aurora-Lakewood metropolitan area increased 5.4% year-over-year in September, compared to price growth of 7.7% in September 2022," researchers said in the report.

Takeaway 3: A recession remains possible

There have been plenty of headlines predicting a coming recession for awhile now, and researchers say many analysts are still predicting a recession in 2024.

Rich Wobbekind, a senior economist and the associate dean for business and government relations at CU Boulder, said consumption grew at a slower rate in the third quarter. Consumers, and their ability to "come to the table" in the months ahead, will tells us more about the economic conditions to come, he said.

A recession, though, can mean many different economic realities. Many minds, upon hearing the word "recession," think of the Great Recession in 2008. Wobbekind noted that that recession impacted America's big banks, which made the economic downturn catastrophic. Currently, he said, the major banks look to be in a very strong position.

"2008 was a financial recession," Wobbekind said. "Financial recessions are much worse and harder to recover from than standard recessions... it's really looking like a slow growth economy in 2024, and it's certainly doesn't look like a disastrous economy in 2024."

You can read the full Quarterly Business and Economic Indicators report here.

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