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

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3 Real GDP Growth Percent Quarterly and Annual Real GDP Quarterly GDP Annualized GDP Annual GDP Sources: Bureau of Economic Analysis and August2012 Consensus Forecast.

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

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

6 Jobless Claims: U.S. vs. Colorado Initial Claims 1,000, , , ,000 0 Initial Claims Continuing Claims U.S. Jobless Claims Continuing Claims 8,000,000 6,000,000 4,000,000 2,000,000 0 Initial Claims 10,000 8,000 Initial Claims 6,000 Continuing Claims 4,000 Colorado Jobless Claims Continuing Claims 100,000 2,000 0 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 80,000 60,000 40,000 20,000 0 Source: U.S. Department of Labor, Employment and Training Administration (Not Seasonally Adjusted).

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

8 Labor Supply versus Labor Demand Unemployed 16,000,000 15,000,000 14,000,000 13,000,000 12,000,000 11,000,000 10,000,000 9,000,000 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 Unemployment and Help Wanted Online Number of Job Ads 7,000,000 6,500,000 6,000,000 5,500,000 5,000,000 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 Sources: The Conference Board and the Bureau of Labor Statistics, Seasonally Adjusted.

9 Impediments to Recovery Access to Credit Housing Confidence Consumer (Household) Leverage Commodity Prices Slow (lagging) Employment Growth U.S. Budget/Debt Crisis Eurozone Debt Crisis

10 U.S. Income and Consumption Percent Change Disposable Income Percent Change Personal Consumption % 1.7% % 2.1% Sources: Bureau of Economic Analysis and Consensus Forecasts.

11 Household Wealth $ Billions 45,000 40,000 35,000 Personal Financial Assets 30,000 25,000 Corporate Equities 20,000 15,000 Real Estate 10,000 5, Q Q Q Q Q Q Q Q Q 2010 Q Q Source: Federal Reserve Board, Balance Sheet of Households and Nonprofit Organizations (B100) (Not Seasonally Adjusted).

12 Securities Trends 14,000 Dow Jones Industrial Average YTD 13,000 12,000 11,000 10,000 9,000 8,000 7,000 6, Sources: Bloomberg.

13 S&P/Case-Shiller Home Price Indices 1-year Home Price Change, June 2012 Atlanta New York Las Vegas Chicago Boston Seattle Detroit San Francisco Dallas Denver Miami Minneapolis -14.0% -10.0% -6.0% -2.0% Percent Change 2.0% 6.0% Source: Standard & Poor s (Not Seasonally Adjusted).

14 Household Debt Burden Percent of Disposable Income DSR 15.0 FOR Debt Service Ratio (L) Financial Obligations Ratio (R) Q1 92 Q1 94 Q1 96 Q1 98 Q1 00 Q1 02 Q1 04 Q1 06 Q1 08 Q1 10 Q1 12 Source: Federal Reserve, Household Debt Service and Obligations Ratios.

15 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.

16 Retail Sales YOY Percentage Change 15.0% 10.0% 5.0% 0.0% -5.0% -10.0% -15.0% Source: U.S. Census Bureau, Monthly Retail Trade Report, Adjusted Retail and Food Services Sales Total.

17 Vehicle Sales and Retail Sales Thousands, SAAR 21,000 Vehicle Sales 19,000 17,000 15,000 13,000 11,000 9, Source: Autodata Corp., Motor Intelligence, Seasonally Adjusted Annual Rate.

18 Nominal Corporate Profits and U.S. Business Fixed Investment Percent Change 30.0 Nominal Pre-Tax Corporate Profits Percent Change 10.0 Business Fixed Investment 8.5% % % 3.2% Sources: Bureau of Economic Analysis, Consensus Forecasts.

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

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

21 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

22 Housing Starts Millions Source: Census Bureau, Consensus Forecast, and Colorado Business Economic Outlook Committee.

23 Federal Budget Balance $ Billions ,000-1,200-1,400-1,600 -$1, $934 Sources: Bureau of Economic Analysis, NIPA Table 3.18B, Consensus Forecasts.

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

25 Global GDP Growth Forecasts 2012 and 2013 Asia Latin America Forecast 2013 Forecast 2012 Eastern Europe Western Europe North America Source: Consensus Forecast Percent

26 Interest Rates Percent Interest Rates, YTD 10 year T-Note month T-Bill Source: U.S. Treasury.

27 Retail Gasoline Prices Dollars per Gallon $4.17 Nationally $4.08 Colorado $3.91 Nationally $3.66 Colorado United States Colorado Source: Energy Information Administration (All Grades/All Formulations). Colorado: Sept. 2008: $3.69 Sept. 2012: $3.63

28 Commodities $ per Barrel $ per Pound $ per Bushel $ per Bushel WTI 12 Wheat Molybdenum Corn Sources: Energy Information Administration and Bloomberg.

29 The FED QE 1 QE 2 Fed promises near zero interest rates until mid-2013 $ Millions 3,000,000 2,500,000 2,000,000 Other Assets Mortgage Backed Securities Federal Agency Debt Securities Treasury Securities Operation Twist Swaps Twist Again (sing along) 1,500,000 1,000, ,000 QE Source: Federal Reserve Balance Sheet.

30 The Colorado Economy (Ed Andrieski) (Cameron Redwine)

31 Change in Population 90,000 Change in Colorado Population ,000 70,000 60,000 50,000 40,000 30,000 20,000 10, Sources: Colorado Demography Office.

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

33 Colorado Employment Months to Recovery Percent Present Number of Months Since Peak Source: Bureau of Labor Statistics (Seasonally Adjusted).

34 Employment Change July 2012 Year-over-Year (NSA) Employment in Thousands 2,310 2,300 2,290 TTU L&H EHS Mfg Finance Mining Govt Other Info Total jobs lost: 2, ,280 2,270 PBS Construction Total jobs gained: 39,800 Net change YTD 2011: 37, ,260 Source: Bureau of Labor Statistics, Current Employment Statistics (Not Seasonally Adjusted).

35 Employment versus Labor Demand Employment (Thousands) 2,400 2,350 2,300 2,250 2,200 2,150 2,100 Employment and Help Wanted Online Number of Job Ads 120, ,000 80,000 60,000 40,000 20,000 0 Sources: The Conference Board and the Bureau of Labor Statistics, Seasonally Adjusted.

36 Regional Employment Growth and Unemployment Employment Growth Rate July YoY Colorado 1.7% Colorado Springs Pueblo Greeley Fort Collins-Loveland Denver-Aurora-Broomfield Boulder Grand Junction -5% 0% 5% 10% Percentage Boulder Fort Collins-Loveland Denver-Aurora- Broomfield Greeley Grand Junction Colorado Springs Unemployment Rate July 2011 Colorado 8.3% Pueblo 2% 4% 6% 8% 10% 12% Percentage Sources: Bureau of Labor Statistics, CES (SA), LAUS (NSA).

37 Per Capita Income Colorado vs. United States PCPI 50,000 45,000 40,000 35,000 30,000 25,000 Per Capita Personal Income Colorado United States Gap Between Colorado & U.S. PCPI Dollars $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $ Sources: Bureau of Economic Analysis.

38 Consumer Price Index Percent CPI Percent Change, United States Denver-Boulder-Greeley Source: Bureau of Labor Statistics.

39 Construction

40 Federal Housing Finance Agency (FHFA) House Price Index FHFA Home Prices by MSA CAGR Q Q Colorado 0.9% Grand Junction, CO Boulder, CO Fort Collins-Loveland, CO Colorado Springs, CO Denver-Aurora-Broomfield, CO Pueblo, CO Greeley, CO Denver-Aurora-Broomfield, CO FHFA Home Prices by MSA Q Q Grand Junction, CO Boulder, CO Fort Collins-Loveland, CO Colorado Springs, CO Pueblo, CO Greeley, CO Colorado 1.4% Percent Source: Federal Housing Finance Agency, All Transactions Indexes Percent

41 Colorado Foreclosures Number of Occupied Units per Foreclosure Boulder Larimer Colorado Occupied Units per Completed Foreclosure Jefferson Douglas El Paso State Total Arapahoe Weld Adams Pueblo Mesa Q Q ,050 1,200 1,350 1,500 1,650 1,800 Source: Colorado Division of Housing, Q2 2011, Q1 2012, and Q Reports.

42 Colorado Foreclosure Filings Number of Occupied Units per Filing Colorado Occupied Units per Foreclosure Filing Boulder Larimer Jefferson El Paso State Total Douglas Arapahoe Pueblo Weld Adams Mesa Q Q Source: Colorado Division of Housing, Q2 2011, Q1 2012, and Q Reports.

43 Value of Construction $ Millions Value of Construction ,000 Nonbuilding 16,000 14,000 12,000 18,000 16,000 14,000 12,000 July YTD ,000 8,000 Nonresidential 10,000 8,000 6,000 4,000 2,000 0 Residential 4,000 2, Sources: McGraw-Hill Construction Dodge Research and Analytics and Colorado Business Economic Outlook Committee. 6,000

44 Colorado Taxable Retail Sales 12-Month Rolling Sum 12-Month Rolling Sum $75,000,000 $70,000,000 Colorado Retail Trade Sales Months $65,000,000 $60,000,000 $55,000,000 $50,000, Sources: Colorado Department of Revenue and Colorado Business Economic Outlook Committee.

45 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.

46 Colorado General Fund $ Millions $8,500 General Fund Projections $ Millions $8,900 Colorado General Fund $8,300 $8,100 June 2012 $8,400 $7,900 $7,700 December 2011 $7,900 $7,500 $7,300 $7,100 December 2010 June 2011 $7,400 $6,900 $6,900 $6,700 FY 2010 FY 2011 FY 2012 $6,400 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 Source: Colorado Office of State Budgeting and Planning.

47 Colorado Economic Indicators Year Consumer Price Inflation Colorado Economic Indicators % Change Retail Sales % Change Personal Income Unemployment Rate % Change Employment

48 LBCI Q Q Index (50=Neutral) Leeds Business Confidence Index Recession 18 months 25 Q Q Q Q Q Q Q Q Q Q3 2012

49 Monthly Employment and LBCI United States vs. Colorado January 2001= U.S. Employment vs. Colorado Employment Colorado 80.0 Leeds Business Confidence Index, Colorado United States United States Q Q Q Q Sources: Bureau of Labor Statistics, CES data (SA) and

50 10 County Population Douglas Weld Mesa Adams El Paso Larimer Arapahoe State Pueblo Boulder Jefferson Annualized Growth Rate % 1% 2% 3% 4% Percentage of 2012 Population El Paso 12.4% Other 28.4% Mesa 2.9% Arapahoe 11.4% Pueblo 3.1% Weld 5.1% Douglas 5.7% Jefferson 10.4% Larimer 5.9% Adams 8.9% Weld 5.3%

51 10 County Retail Sales Adams Weld Douglas Mesa Pueblo Boulder Larimer El Paso Arapahoe Jefferson Annualized Growth Rate % 2% 4% 6% 8% 10% Percentage of June 2012 State Retail Sales Pueblo 3.0% Other 32.8% Adams 12.0% Arapahoe 10.9% Mesa 3.3% Weld 4.7% Douglas 5.0% Weld 5.3% El Paso 9.3% Boulder 5.3% Jefferson 8.5%

52 10 County Assessed Valuation Weld Mesa Pueblo Douglas Larimer El Paso Adams Boulder Arapahoe Jefferson Annualized Growth Rate % 2% 4% 6% 8% 10% Percentage of 2012 Assessed Values Other 44.6% Pueblo 1.8% Adams 5.2% Mesa 2.3% Weld 6.2% Douglas 5.1% Weld 5.3% Boulder 6.4% Jefferson 8.0% El Paso 7.2% Arapahoe 8.5%

53 10 County Employment Weld Douglas Pueblo Adams Mesa Larimer Jefferson Arapahoe Boulder El Paso Annualized Growth Rate Q Q % 1.0% 2.0% 3.0% 4.0% Percentage of 2011 State Employment Other 34.7% Arapahoe 12.5% Pueblo 2.6% Mesa 2.6% Weld 3.7% El Paso 10.6% Douglas 4.1% Adams 7.0% Boulder 7.1% Jefferson 9.3% Larimer 5.8% Sources: Colorado Department of Labor and Employment, and Bureau of Labor Statistics (QCEW).

54 10 County Wages Arapahoe Boulder Douglas Jefferson El Paso Adams Larimer Weld Mesa Pueblo Average Annual Wages (in Thousands) Colorado: $49,082 $0 $10 $20 $30 $40 $50 $60 Percentage of 2011 State Wages Other 36.2% Arapahoe 14.4% Pueblo 1.9% Mesa 2.1% Weld 3.1% Douglas 4.4% Larimer 5.0% Adams 6.2% Boulder 8.0% Jefferson 9.2% El Paso 9.5% Source: Bureau of Labor Statistics (QCEW).

55 Thank You

Dr. Richard Wobbekind Executive Director, Business Research Division and Senior Associate Dean for Academic Programs University of Colorado Boulder

Dr. Richard Wobbekind Executive Director, Business Research Division and Senior Associate Dean for Academic Programs University of Colorado Boulder Member FDIC VectraBank.com Economic Outlook 2015 Richard