Colorado’s economic outlook is mixed, say state economists, as key indicators continue to give conflicting forecasts.
Meanwhile stubborn inflation — and the central bank’s effort to tame it with higher interest rates — make it difficult for economists to predict what comes next.
“I think this is still a question mark about the current environment that we’re in and how businesses will thrive over the next year,” Brian Lewandowski, the executive director at CU’s Leeds Business Research Division, said during a conference call with reporters to discuss the report.
A positive indicator includes the number of new entities filing to do business in Colorado — a sign the state's entrepreneurs are feeling confident. That number jumped 14.5 percent higher during the third quarter compared to the last year, according to a joint report from Colorado’s Secretary of State and the University of Colorado’s Leeds Business Research Division.
But, at the same time, the number of business delinquencies and dissolutions also rose sharply, the report found.
The conflicting signals are indicative of how hard it is for economists to pinpoint where the business cycle is heading, Lewandowski said.
The Federal Reserve’s attempt to combat the highest inflation in 40 years by rapidly raising interest rates is starting to cool economic growth nationwide, Lewandowski said, most visibly in the housing market.
Still, Colorado continues to add jobs, as does the U.S. broadly, scrambling predictions about the pace and timing of a potential recession.
In the spring, CU economists expected flat job growth at the end of the year, but that forecast has changed to bake in better-than-expected employment data in recent months.
“The current labor market is continuing to defy expectations,” he said.
Lewandowski thinks that could change at the start of next year. One potential trouble spot is the technology sector, with high-profile companies including Facebook, Amazon and Twitter announcing massive layoffs in recent weeks.
