President Donald Trump, in Tuesday’s State of the Union speech, took credit for the country’s long listof positive economic figures. Addressing lawmakers and special guests, includinga Colorado DREAMer, he called it an “American moment.”
“There has never been a better time to start living the American dream,” he said. “ So, to every citizen watching at home tonight, no matter where you have been or where you have come from, this is your time.”
So, is the economic “moment” in Colorado reflective of the president’s words? We compared some of the national trends touted by Trump during his speech with local perspectives presented at last week’s 2018 Northern Colorado Economic Forecast.
Manufacturing
During his speech, Trump noted that 2.4 million jobs had been created since he entered office. Of those, 200,000 were in manufacturing.
In Colorado, manufacturing is a $23 billion industry, making up about 7 percent of the state’s nominal GDP. In 2017, it employed approximately, 144,000 workers, according to the 2018 Colorado Business Economic Outlook.
Employment in the local industry is projected to grow modestly, at 1.1 percent in 2018.
At the 2018 forecast last week, Chris Otto, audit partner at EKS&H, citing a national survey, said 62 percent of Colorado manufacturers expect their revenues to grow this year.
“I think manufacturing is a big driver here in Northern Colorado,” he said. “We’ve got a lot of great momentum that are helping get the word out and I think it’s going to continue to do that.”
Other priorities include recruiting new, younger talent to fill the voids left by retiring baby boomers, cutting costs and developing new products and services.
Business filings
Trump also cheered the GOP’s passage of new tax laws that cut the business tax rate from 35 percent down to 21 percent. A necessary step, he said, so “American companies can compete and win against anyone else, anywhere in the world.”
The number of new businesses filing in Colorado grew by nearly 10 percent between 2016 and 2017. Last year, 117, 648 businesses filed with the Colorado Secretary of State’s office, according to the agency.
“Year-over-year increases in new entity filing and existing entity renewals have me very optimistic that Colorado’s steady economic growth will continue in 2018,” Colorado Secretary of State Wayne W. Williams said in a Jan. 23, 2018, statement.
Minority unemployment rates
At the end of 2017, the national unemployment rate for African Americans was 6.8 percent - the lowest it’s ever been. Hispanic unemployment is also near a record low, according to the federal Bureau of Labor Statistics.
The Colorado Department of Labor and Employment doesn’t release unemployment data based on race, gender or ethnicity. But preliminary 2017 data from the Bureau of Labor Statistics found that Colorado’s unemployment rate for African Americans was 4.8 percent -- significantly lower than the national rate.
The unemployment rate for Hispanic Americans was also lower in Colorado, at 3.4 percent.
Richard Wobbekind, economist at the University of Colorado Leeds School of Business said he expects Colorado’s unemployment rates for minority groups to rise and fall with national changes.
“As long as the state continues to have a low unemployment rate, there’s no reason that rates for specific races and ethnicities should be higher than the national figure,” he said.
Job growth
As the national economy hovers near full employment, the state’s job growth is expected to slow down. All of Colorado’s key industries are still expected to add jobs in 2018, but not as aggressively as they have in recent years:
Construction 1.5 percent growth; 2,500 jobs
Education and health services 2.5 percent growth; 8,400 jobs
Financial activities 1.2 percent growth; 2,000 jobs
Government 1.1 percent growth; 4,600 jobs
Information 0.4 percent growth; 300 jobs
Leisure and hospitality 1.9 percent growth; 6,200 jobs
Manufacturing 1.1 percent growth; 1,600 jobs
Natural resources and mining 4.4 percent growth; 1,100 jobs
Professional and business services 2.4 percent growth; 10,000 jobs
Trade, transportation and utilities 1.9 percent growth; 8,700 jobs
Other services 1.6 percent growth; 1,700 jobs
Total 1.8 percent growth; 47,100 jobs
Wage growth
“After years and years of wage stagnation, we are finally seeing rising wages,” Trump said in his speech.
One of the most concerning areas to economists at the moment is Northern Colorado’s slow rate of wage growth, especially considering the region’s rising housing prices.
Colorado’s growth in annual pay was 2.5 percent last year, barely keeping up with inflation. Per capita personal income has increased modestly during the past few years, from $40,109 in 2013 to approximately $49,000 in 2017. That’s about $5,000-$7,000 less than the state as a whole.
