Metro Denver’s unemployment rate declined to 7.5 percent in April, compared with 8.2 percent in March, but economists noted the rate reliably dips between March and April, and said they don’t believe the report indicates the area’s economic fortunes have suddenly turned.
A year ago, the unemployment rate for the metro area, which includes the Denver-Aurora-Broomfield area, was 4.3 percent.
Alexandra Hall, chief economist at the Colorado Department of Labor and Employment, said the monthly dip likely reflects an increase in seasonal work, such as construction, that requires warm weather.
The construction industry “peaks in the summer,” Hall said. “When weather starts to get cold and bad, the construction workers are no longer employed. I can’t look at April’s numbers and compare them to March’s numbers.”
On a seasonally adjusted basis, the state unemployment rate is 7.4 percent, ranking it 20th in the nation.
That is much better than the national rate, which is expected to jump to 9.2 percent for May, said Jeff Thredgold, an economist for Vectra Bank Colorado.
“As bad as 7.4 percent is, it looks awfully good compared to the Californias, Nevadas and Michigans of the world,” Thredgold said.
Nevada ranked 45th with an unemployment rate of 10.6 percent. California came in at No. 47 with 11 percent unemployment, and Michigan is dead last with a rate of 12.9 percent.
The metro area’s April unadjusted unemployment rate is lower than that of a number of other cities nationwide, including Miami, at 8.5 percent; Chicago, 9.8 percent; and Las Vegas, 10.4 percent. Cities with a lower rate include Phoenix at 6.8 percent; New Orleans, 5.3 percent; and Santa Fe, 5 percent.
Unemployment is rising, but its rate of acceleration is starting to slow.
“The economy is not doing well, but it’s slowing at a slower rate than it was at the end of last year and the first part of this year,” said economist Tucker Hart Adams.
Another indication that the economy’s slide is slowing is that the inventory of homes on the market is declining, Adams said. In April, there were 20,705 homes on the metro market, down nearly 21 percent from the same period a year ago.
“I don’t know that we can say job losses are slowing just yet — I need another month of data to tell,” Hall said. “But when you see that Denver’s housing market is considered the best in the nation for being positioned to turn around and rebound, that’s great news.”
The Denver area fared the best among 20 U.S. cities reporting sharp drops in home prices in March, according to the Standard & Poor’s/Case- Shiller home-price index.
The index for 20 major cities dropped 18.7 percent in March, compared with March 2008. Denver reported a 5.5 percent decline in home prices, better than Dallas and Boston, which were down 5.6 percent and 8 percent, respectively.
“From the start of this recession, the housing market has been the biggest drain on the economy,” Hall said. “It’s what led us into this recession, and before we can start (gaining) ground, the housing market has to find its bottom and start turning around.”
Margaret Jackson: 303-954-1473 or mjackson@denverpost.com
