The KC Federal Reserve District’s economy is relatively more focused on commodities and national defense. The region encompasses Colorado, Kansas, Nebraska, Oklahoma, Wyoming, and portions of western Missouri and northern New Mexico. Job growth in the region during and after the last eight national recessions is consistent with the nation; however, the region is consistently late to fall into recessions and early to recover from recessions.
FNC Residential Index
One should not assume that just because Denver has done so well (relatively speaking of course) during thr housing bust that the entire state has performed the same way. However, regions do tend to generally move together with economists’ favorite assumption of ceteris paribus.
The Western Blue Chip Consensus Forecasts changed very little from last month. Summit Economic’s forecast is slightly lower than other forecasters, more consistent with the Colorado Legislative Council and the Governor’s Office of State Planning and Budget.
Click Image to Make larger
Consensus forecasts for Colorado in 2011 are shown to outperform most other western states in population growth, underperform in forecasted change in building permits, and be in the middle of the pack for personal income and employment growth.
The best news – all states are forecasting job growth next year, with the exception of Nevada. But then again, these are forecasts. (For the complete forecast Click Here)
As depicted in the Bureau of Labor Statistics graph below, the Rocky Mountain Region consistently out performs other regions in the nation in terms of GDP growth.
Click on the graph to see the full image
A curious question is why does the unemployment rate in the region, while lower than the nation, seem to be lagging the nation in terms of the degree of improvement (or lack thereof). The key factor centers on employment growth versus population growth. The Rockies continue to attract new households from around the nation, albeit probably at slower rates as migration has slowed in current economic malaise. Since 2000, Colorado has only added 1 new job for every 8 additional people in the state. That compares to a labor force participation rate of 1 job for every 2 person.
With new people comes consumption and investment thereby raising GDP, but not necessarily adding jobs at a rate sufficient to lower the unemployment rate.