Steeper job declines in Colorado and metro Denver could translate into a longer recovery time for local labor markets, according to a midyear economic update from the Metro Denver Economic Development Corp.
“So far, the unevenness of recovery has also surprised many who hoped for a more definitive return to growth,” said Patty Silverstein, chief economist for the economic development group, on Thursday.
Unemployment rates in both Colorado, 8.1 percent, and metro Denver, 8 percent, will remain well below the U.S. average of 9.8 percent.
But job losses this year will continue to be much larger than the 0.3 percent to 0.5 percent decline forecast for the U.S. — 1.1 percent for metro Denver and 1.3 percent for Colorado, Silverstein predicted.
The report said Colorado won’t replace the 106,000 jobs lost in 2009 at least until mid-2013, if not later. And because 3,000 to 4,000 jobs a month are needed to keep pace with new workers entering the labor force, a complete recovery will take even longer.
One thing Silverstein said to watch in the near-term is whether the homebuyer tax credits only borrowed from future sales or created a self-sustaining momentum.
Her forecast calls for home sales in the metro area to rise 2.2 percent and median metro home prices to increase 6 percent, helped along by a 9.8 percent drop in foreclosures this year.
Permits for new homes in the metro area should reach 4,700 units in 2010, a 38 percent increase over last year. That is a little more than a quarter of the 30-year average of 17,700 units a year.
Aldo Svaldi: 303-954-1410 or asvaldi@denverpost.com
