Economic Forecast Shows Despite Supply Chain Headwinds, Colorado’s Overall Economic Growth, Income & Consumption Remain Strong
Polis Administration Committed to Saving People Money & Building a Healthy Economy
DENVER - The Governor’s Office of State Planning and Budgeting (OSPB) released its quarterly economic forecast today.
“Colorado’s economy is coming back strong. Over 80% of adult Coloradans have received the life saving vaccine and Colorado is a leading state for vaccinating 5-11 years olds. Coloradans doing their part to end this pandemic is empowering a rapid economic recovery. This forecast shows a robust recovery. My administration has been hard at work saving Coloradans money and this forecast is a call to action to double down on our efforts to save people money on everyday items, on health care, fees and prescription drugs,” said Governor Polis.
Colorado’s unemployment rate has declined again, and the state continues to experience a faster rate of recovery in the labor force participation rate than the U.S. The forecast shows that Colorado’s unemployment rate remains above the national rate with jobs in sectors including leisure and hospitality recovering less than goods related industries, such as retail and warehousing.
The state’s labor force participation rate has begun to fall in recent months though, which has driven up wages to incentivize job growth.
General Fund revenue is projected to increase to $16.0 billion in FY 2021-22, a 12.2 percent change from the prior fiscal year. The projection for FY 2021-22 is $704.5 million higher than the September forecast. The growth rate is expected to moderate to 2.0 percent in FY 2022-23 and 3.9 percent in FY 2023-24. This upward revision is due to high revenue collections in recent months in individual income, corporate income and sales revenue.
Total cash fund revenue subject to TABOR is expected to be $2.4 billion in FY 2020-21, a 9.3 percent increase from the prior fiscal year. In FY 2022-23, cash fund revenue is projected to increase by 4.1 percent followed by 5.5 percent growth in FY 2023-24.
Nationally, the U.S. economy is continuing to rebound, however the nation faces greater headwinds than previously expected as a result of prolonged supply chain disruptions. Due to high demand and delays in goods supply, inflation has accelerated in recent months. The labor market is tight, as job openings outnumber unemployed workers, which is putting upward pressure on wages.