The Economic Story
THE ECONOMIC STORY
There is no question that 2009 was an extremely difficult year for the economy. Every state lost jobs during the year. Colorado’s unemployment rate rose 1.7 percent during that period – ending the year at 7.5 percent. We are still 2.5 points below the national average. And the rise in unemployment was one of the lowest in the country. Only five other states (Minnesota, Nebraska, North Dakota, South Dakota and Vermont) beat Colorado in the rate of unemployment change. Nevertheless, job losses were steep and many families are struggling.
Did the Recovery Act help? Absolutely. A growing number of studies are showing that the Recovery Act helped stop the economic bleeding and shifted the economy toward recovery:
- The Council of Economic Advisors, which advises President Obama on economic policy, issued a report on Jan. 13, 2010, that said the Recovery Act increased real Gross Domestic Product between three and four percentage points in the third quarter, and between 1.5 and three percentage points in the fourth quarter. The Recovery Act added between 1.5 and 2 million jobs in 2009, the report said. Indeed, job losses in the fourth quarter were one-tenth their size in the first quarter, the report said. In Colorado, the Council of Economic Advisors estimate that 33,000 jobs were created, retained or induced because of the Recovery Act.
- A recent USA Today survey of 50 economists indicated that the Recovery Act saved jobs. The economists said that unemployment would have hit 10.8% — higher than December's 10% rate — without the Recovery Act. That difference would have meant another 1.2 million lost jobs.
- A November 2009 report released by the Congressional Budget Office said that the Recovery Act increased GDP between 1.2 and 3.2 percent and added 600,000 to 1.6 million jobs across the country.
- Reports related to about one-third of Recovery Act funds showed that more than 600,000 full-time equivalent jobs were created or retained across the nation between Feb. 17 and Sept. 30, 2009. Almost the same number of jobs were created or retained in the last three months of 2009, according to reports submitted to the federal government by more than 100,000 recipients of ARRA grants, loans and contracts.
Going forward, experts predict that 2010 will see economic stabilization both in Colorado and across the nation. But state revenue shortfalls will continue to pose challenges, and severe budget cuts are on the near horizon. All told, $2 billion will have been cut since mid-2008. Colorado will continue to benefit from companies moving here or expanding, and from the New Energy Economy. In 2009, the Colorado Office of Economic Development helped private enterprises create 9,000 new jobs and retain an existing 4,700 jobs. The New Energy Economy continues to be one of our strongest sectors, with 17,000 people now working in renewable energy and energy research jobs in Colorado, the fourth-highest concentration in the country.