10 County Conference. Richard Wobbekind. Executive Director Business Research Division & Senior Associate Dean Leeds School of Business

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1 10 County Conference Richard Wobbekind Executive Director Business Research Division & Senior Associate Dean Leeds School of Business

2 Real GDP Growth Percent Quarterly and Annualized Real GDP Annualized GDP Annualized GDP Quarterly GDP Sources: Bureau of Economic Analysis and Consensus Forecasts.

3 National Employment Thousands, Monthover-Month Recession 8 Months Recession 18 Months Sources: Bureau of Labor Statistics (Seasonally Adjusted), National Bureau of Economic Research, and NABE Outlook June 2014.

4 Labor Underutilization Percentage of Labor force U-6 U-5 U-4 U-3 U U Source: Bureau of Labor Statistics (Seasonally Adjusted).

5 National Employment Months to Recovery Percent Present Number of Months Since Peak Source: Bureau of Labor Statistics, CES (Seasonally Adjusted).

6 National Peak to Peak Employment

7 National Labor Force Thousands 180, , , , ,000 80,000 60,000 40,000 20,000 0 Q Q Q Q Q Q Q Q Labor Force Q Q Q Q Q Labor Force Participation Rate Q Q Q Q Q Percent 68.0 Q Source: Bureau of Labor Statistics, seasonally adjusted.

8 Labor Force and Unemployment Rate National, by Age Cohort, % 80% 70% 71% 81% 82% 80% 64% LFPR UR 60% 50% 40% 30% 20% 10% 13% 19% 7% 6% 6% 5% 5% 0% and Older Age Cohort

9 U.S. Income and Consumption Percent Change Disposable Income Percent Change Personal Consumption % 2.8% % 2.8% Sources: Bureau of Economic Analysis and Consensus Forecasts.

10 Household Wealth $ Billions 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 Mutual Funds Corporate Equities Real Estate 0 3Q Q Q Q Q Q Q 2014 Source: Federal Reserve Board, Balance Sheet of Households and Nonprofit Organizations (B100) (Not Seasonally Adjusted).

11 Household Debt Burden Percent of Disposable Income DSR Financial Obligations Ratio (R) FOR Debt Service Ratio (L) Q Q Q Q Q Q Q Q Q Q Q Source: Federal Reserve, Household Debt Service and Obligations Ratios.

12 Index of Consumer Confidence 1985= Recession 8 months Mountain Region Recession 8 months Recession 18 months United States Sources: The Conference Board and National Bureau of Economic Research.

13 Vehicle Sales and Retail Sales Thousands, SAAR 25,000 Vehicle Sales Retail and Food Services Sales YOY, Percentage Change , ,000 10,000 5, Sources: Seasonally Adjusted Annual Rate, Autodata Corp., Motor Intelligence, U.S. Census Bureau.

14 Nominal Corporate Profits and U.S. Business Fixed Investment Percent Change Nominal Pre-Tax Corporate Profits Percent Change Business Fixed Investment % 6.0% % % Sources: Bureau of Economic Analysis, Consensus Forecasts.

15 ISM Indices 70 ISM Manufacturing Index 70 ISM Non-Manufacturing Index Source: Institute for Supply Management (ISM).

16 S&P/Case-Shiller Home Price Indices New York Chicago Minneapolis Boston Denver Dallas Atlanta Seattle Detroit Miami San Francisco Las Vegas 0% 2% 4% 6% 8% 10% 12% 14% 16% Percent Change Source: Standard & Poor s (Not Seasonally Adjusted). 1-year Home Price Change, June 2014

17 Housing Affordability Index Composite Index Jan-81 Jan-84 Jan-87 Jan-90 Jan-93 Jan-96 Jan-99 Jan-02 Jan-05 Jan-08 Jan-11 Jan-14 Source: National Association of Realtors.

18 NAHB Housing Market Index 50=Neutral Source: National Association of Homebuilders.

19 U.S. Housing Supply, Inventory, and Permits New SF Home Inventory (thousands) 700 U.S. Housing Supply, Inventory, and Permits Months of Supply SF Homes for Sale Housing Supply Number of Private Housing Building Permits Source: New Houses Sold and For Sale, U.S. Census Bureau

20 National Housing Starts Millions Sources: U.S. Census Bureau and Consensus Forecasts.

21 Federal Budget Balance $ Billions ,000-1,200-1,400-1,600 -$502 -$ Sources: Bureau of Economic Analysis, NIPA Table 3.18B, Consensus Forecasts.

22 U.S. Nominal Broad Dollar Index and Real Net Exports U.S. Nominal Broad Dollar Index 1973= $ Billions Real Net Exports Sources: Federal Reserve, Bureau of Economic Analysis, Consensus Forecasts.

23 Money, Interest Rates, and Prices

24 The FED QE 1 QE 2 Fed promises near zero interest rates until mid-2013, 2014, 2015, 2016? Operation Twist Swaps $ Millions 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000, ,000 Other Assets Mortgage Backed Securities Federal Agency Debt Securities Treasury Securities Tapering Source: Federal Reserve Balance Sheet.

25 Interest Rates Percent Interest Rates, Year T-Note Month T-Bill Source: U.S. Treasury.

26 U.S. Summary GDP growing after rough Q1 Housing in recovery Balance sheets getting stronger Consumers stay in the marketplace Business investment grows Fiscal drag (slower growth of G) continues but is a smaller issue International economies grow but at a subdued pace Tapering continues with modest impact on long term rates Inflation low and stable

27 The Colorado Economy

28 Change in Population Change in Colorado Population Thousands Net Migration Among top 4 states for percentage growth 5 th fastest for absolute growth 22 nd - most population in U.S Natural Increase Continued net migration into the state 83% of population in 12 Front Range counties Source: Colorado Demography Office.

29 Colorado Employment and Education, 2013 Other 69% Employment by Occupation Management 4% Bus. and financial operations 7% Computer and math 4% Architecture and engineering 2% Science 1% Education training 6% Arts and entertainment 2% Healthcare 5% Educational Attainment Adults over age 25 with a bachelor s degree or higher U.S. 29.1% Colorado 37.5% Adults over age 25 with a high school diploma U.S. 86.4% Colorado 90.6% Sources: Bureau of Labor Statistics, Quarterly Census of Employment and Wages.

30 Colorado Employment Workers Added Thousands Sources: Colorado Department of Labor and Employment and Colorado Business Economic Outlook Committee.

31 Employment Change July July 2014 Employment in Thousands 2,470 2,460 2,450 2,440 TTU Const Govt MFG Mining Other Info Financial ,430 2,420 PBS L&H Total jobs lost: 2,300 2,410 2,400 EHS 2,390 2,380 Total Total jobs gained: 70,200 Net change: 67,900 2,370 2,360 2,350 Source: Bureau of Labor Statistics, Current Employment Statistics (SA).

32 The Top 5 vs. The Bottom 5 States Jobs Added in 2014 and 2015 Forecast North Dakota Nevada Texas Utah Colorado Alaska Illinois Virginia New Jersey New Mexico -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% Texas North Dakota Colorado Arizona Florida Mississippi Vermont Maine New Mexico Illinois 0.0% 1.0% 2.0% 3.0% 4.0% Source: Moody s Economy.com based on July 11, 2014 release.

33 Employment Recovery National, State, and Local Percent 8.0 Employment Recovery: National, State, and Local Denver and Boulder MSAs National Colorado Colorado Springs MSA Number of Months Since Peak Source: Bureau of Labor Statistics (Seasonally Adjusted).

34 Regional Employment Growth and Unemployment Employment Growth Rate, July 2014 YoY Greeley Boulder Denver-Aurora- Broomfield Fort Collins-Loveland Pueblo Grand Junction Colorado Springs Colorado 2.7% Greeley Boulder Denver-Aurora- Broomfield Fort Collins-Loveland Pueblo Grand Junction Colorado Springs Unemployment Rate July 2014 Colorado 5.3% NSA 5.3% SA Source: Bureau of Labor Statistics, Current Employment Statistics.

35 Personal Income Growth 2013

36 Colorado Per Capita Personal Income By MSA, 2012 United States $43,735 Colorado $45,775 Boulder Denver-Aurora-Broomfield Fort Collins-Loveland Colorado Springs Grand Junction Pueblo Greeley $20,000 $30,000 $40,000 $50,000 $60,000 Source: Bureau of Economic Analysis, 2012 annual data.

37 Construction

38 Federal Housing Finance Agency (FHFA) House Price Index Federal Housing Finance Agency Home Prices by MSA Q Q Colorado 9.5% Federal Housing Finance Agency Home Prices by MSA CAGR Q Q Colorado 1.7 Denver-Aurora-Lakewood Denver-Aurora-Lakewood Boulder Fort Collins Greeley Colorado Springs Grand Junction Pueblo Boulder Fort Collins Greeley Colorado Springs Grand Junction Pueblo Percent Percent Source: Federal Housing Finance Agency, All Transactions Indexes.

39 Colorado Foreclosures Number of Occupied Units per Foreclosure Colorado Occupied Units per Completed Foreclosure Boulder Broomfield Denver Jefferson Larimer Douglas Arapahoe State Average El Paso Adams Weld Q Q ,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 Source: Colorado Division of Housing, Q and Q Reports.

40 Value of Construction Colorado $ Millions 18,000 16,000 18,000 16,000 August YTD ,000 12,000 Nonbuilding 14,000 12,000 10,000 Nonresidential 10,000 8,000 8,000 6,000 6,000 4,000 2,000 Residential 4,000 2, Source: McGraw-Hill Construction.

41 Retail Trade Sales Colorado Taxable Retail Sales 12-Month Rolling Sum 12-Month Rolling Sum, $ Millions Percent Change Colorado Retail Trade Sales Nominal Growth Real Growth Sources: Colorado Department of Revenue and Colorado Business Economic Outlook Committee.

42 Colorado General Fund Gross Revenue (excluding reserves, diversions, and transfers) $ Millions $11,500 $11,000 $10,500 $10,000 $9,500 $9,000 $8,500 $8,000 $7,500 $7,000 General Fund Projections December 2013 December 2012 June 2014 December 2011 March 2014 September 2013 September 2012 $ Millions $10,900 $10,400 $9,900 $9,400 $8,900 $8,400 $7,900 $7,400 $6,900 $6,400 FY 2006 Colorado General Fund FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 Source: Colorado Office of State Budgeting and Planning, excluding reserves, diversions, and transfers, March FY 2012 FY 2013 FY 2014 FY 2015

43 State Summary Colorado outperforms nation in employment growth Diversified economy Falling unemployment Growing population Weather a factor for Ag and Tourism Home prices rising slowly, steadily Construction and Technology strong Airport supports growth

U.S. and Colorado Economies Q3 2004 Q3 2014 Index (50=Neutral) 75 National and State Expectations 70 65 60 Colorado 55

44 U.S. and Colorado Economies Q Q Index (50=Neutral) 75 National and State Expectations Colorado United States Q Q Q Q Q Q Q Q Q Q Q3 2014

45 Employment and New Entity Filings Employment, thousands 2, month total new entity filings 95,000 2,450 90,000 2,400 2,350 2,300 2,250 2,200 Employment New Entity Filings 85,000 80,000 75,000 70,000 65,000 2, ,000 Note: Solid line displays actual seasonally adjusted employment numbers; dotted line reflects calculated forecasts. Source: Seasonally adjusted. Colorado total nonfarm employees from the Bureau of Labor Statistics, Current Employment Statistics (CES), calculations by BRD research team.

46 Colorado Economic Indicators Year Consumer Price Inflation Colorado Economic Indicators Percent Change Retail Sales Percent Change Personal Income Unemployment Rate Percent Change Employment 2012 a a a Historical data.

47 Concerns Impact of Federal Government Finance on State Haves and Have Nots State Government Finance Higher Education Transportation Fracking Impact of Natural Disasters Marijuana Impacts Cost of Housing

48 Drilling Permits by County 2013 Weld Garfield Rio Blanco Mesa Lincoln Cheyenne Moffat Adams La Plata Arapahoe Washington Morgan Montezuma Dolores Jackson Kiowa Routt Gunnison Yuma Archuleta Logan Elbert Fremont Larimer Las Animas Baca Bent Delta Eagle El Paso Huerfano Jefferson Kit Carson Alamosa Boulder Broomfield Chaffee Clear Creek Conejos Costilla Crowley Custer Denver Douglas Gilpin Grand Hinsdale Lake Mineral Montrose Otero Ouray Park Phillips Pitkin Prowers Pueblo Rio Grande Saguache San Juan San Miguel Sedgwick Summit Teller Permits 2,500 2,000 1,500 1, Sources: COGCC.

49 Colorado National Park Recreation Visits 12-Month Rolling Sum, in thousands 6,200 6,000 5,800 5,600 5,400 5,200 5,000 4, Source: National Park Service Public Use Statistics Office.

50 Marijuana Tax Revenue Collected

51 Marijuana Tax Collections Per Capita

52 10 County Population Douglas Weld Adams Mesa Larimer Arapahoe State El Paso Pueblo Boulder Jefferson Annualized Growth Rate Colorado: 1.5% 0% 1% 2% 3% 4% Percentage of 2014 Population Other, 28.0% El Paso, 12.5% Arapahoe, 11.5% Mesa, 2.9% Pueblo, 3.1% Weld, 5.1% Jefferson, 10.5% Douglas, 5.7% Larimer, 6.0% Adams, 8.9% Boulder, 5.9%

53 10 County Employment By Industry 10 County Region Rest of Colorado Healthcare & Social Assistance 12% Accommodation & Food Services 10% Prof. & Tech. Services 9% Manufacturing 7% Construction 5% Prof. & Tech. Services 8% Other 38% Retail Trade 13% Retail Trade 9% Government 18% Other 31% Healthcare & Social Assistance Accommodation & Food Services 10% 13% Government 17%

54 10 County Employment Douglas Weld Adams Larimer Mesa Arapahoe Boulder Jefferson Pueblo El Paso Annualized Growth Rate Q Q % 1.0% 2.0% 3.0% 4.0% 5.0% Percentage of 2013 State Employment Other 34.7% Arapahoe 12.5% Pueblo 2.6% Mesa 2.6% Weld 3.7% Douglas 4.1% El Paso 10.6% Jefferson 9.3% Adams 7.0% Boulder 7.1% Larimer 5.8% Sources: Colorado Department of Labor and Employment, and Bureau of Labor Statistics (QCEW).

55 10 County Wages Arapahoe Boulder Douglas Average Annual Wages (in Thousands) Colorado: $50,861 Pueblo, 1.8% Percentage of 2013 State Wages Mesa, 2.0% Weld, 3.3% Douglas, 4.8% Larimer, 5.0% Jefferson Adams El Paso Larimer Other, 35.7% Adams, 6.9% Boulder, 8.0% Weld Mesa Pueblo $0 $10 $20 $30 $40 $50 $60 $70 Arapahoe, 14.5% El Paso, 9.1% Jefferson, 9.0% Source: Bureau of Labor Statistics (QCEW).

56 10 County Assessed Valuation Weld Mesa Pueblo Douglas Larimer Adams El Paso Boulder Arapahoe Jefferson Annualized Growth Rate % 2% 4% 6% 8% 10% 12% Percentage of 2013 Assessed Values Other, 42.3% Arapahoe, 8.6% Pueblo, 1.9% Mesa, 2.1% Larimer, 4.8% Douglas, 5.3% Adams, 5.4% Jefferson, 8.0% Weld, 8.1% Boulder, 6.5% El Paso, 7.2%

57 10 County Total Revenue Weld Pueblo Mesa Adams Douglas Boulder Larimer Arapahoe El Paso Jefferson Annualized Growth Rate % 2% 4% 6% 8% 10% Percentage of 2013 Total Revenue Other, 34.6% Mesa, 1.6% Arapahoe, 11.3% Pueblo, 2.1% Jefferson, 10.0% Larimer, 5.3% El Paso, 6.4% Adams, 7.4% Weld, 6.9% Douglas, 7.1% Boulder, 7.3%

58 10 County Retail Sales Adams Weld Douglas Pueblo Boulder Mesa Larimer Annualized Growth Rate Other, 30.7% Percentage of 2013 State Retail Sales Pueblo, 2.5% Mesa, 2.7% Douglas, 4.8% Larimer, 5.0% Weld, 5.6% Boulder, 5.7% El Paso Arapahoe Jefferson 0% 2% 4% 6% 8% 10% Adams, 13.0% Arapahoe, 11.9% Jefferson, 9.1% El Paso, 9.0%

60 Thank you

61 Job Openings and Labor Turnover (JOLTS) Thousands 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, Job Openings Source: Bureau of Labor and Statistics, Seasonally Adjusted.

62 Commodity Prices, September 2014 Averages Compared to Five-Year High and Low Corn ($/bushel) Wheat ($/bushel) Molybdenum ($/pound) Oil ($/barrel) Commodity Prices, September 2014 Averages Compared to Five-Year High and Low Low $3.14 $3.88 $10.75 $65.72 Current Price $3.39 $13.25 $6.09 $93.32 High $8.58 $9.18 $18.13 $ Source: Bloomberg.

Location Quotient Colorado 2.5 2.3 LQ Mining 2.1 1.9 1.7 1.5 1.

1 Government 0.9 0.7 Manufacturing 0.5-2.0% 0.0% 2.0% 4.0% 6.

63 Location Quotient Colorado LQ Mining Information Financial activites TTU L&H Construction PBS 1.1 Government Manufacturing % 0.0% 2.0% 4.0% 6.0% 8.0% Sources: Bureau of Labor Statistics, QCEW. EHS 3 Year CAGR

10 County Conference. Richard Wobbekind. Executive Director Business Research Division & Senior Associate Dean Leeds School of Business

10 County Conference. Richard Wobbekind. Executive Director Business Research Division & Senior Associate Dean Leeds School of Business 10 County Conference Richard Wobbekind Executive Director Business Research Division & Senior Associate Dean Leeds School of Business Hmm... (http://myfallsemester.blogspot.com) Real GDP Growth Percent