Colorado dodged a recession this year. Can it do it again in 2024?

Colorado’s economy next year won’t be a bed of roses, with job gains running at their slowest pace since 2011 and commercial real estate under extreme stress. But neither will it be a bed of thorns, as inflation eases and a recession doesn’t set in, according to the 2024 Colorado Business Economic Outlook.

“It is a slower-growth story. There are positive nuggets in there. We aren’t forecasting a recession and we expect a continued abundance of job opportunities for people,” said Brian Lewandowski, executive director of the Business Research Division at the University of Colorado Boulder Leeds School of Business, which puts the Outlook together each year.

The Outlook, based on input from 130 individuals across a variety of industries, as well as a sophisticated computer model, forecasts employers in the state will add 42,000 nonfarm jobs. The state’s unemployment rate will average 3.4%, not far off the 3.3% rate reached in October.

Adding 42,000 jobs translates into a job growth rate of 1.4%, below the 2.2% growth rate estimated for this year. Initial employment reports through October put Colorado at a 1.1% annual pace, so reaching the expected rate will depend on some big revisions.

“We went from being roughly a top 10 state to being a bottom 10 state for job growth. How could we be so wrong and do we need to revise down our employment numbers?” Lewandowski said of the questions the Outlook panel asked as it tried to prepare its 2024 forecast.

The team essentially did the equivalent of throwing a red flag in football and challenged the initial statistics, which are based on employer surveys and later adjusted based on the actual headcounts reported in quarterly unemployment insurance premium reports.

Other indicators were showing a much stronger economy than what the job numbers were suggesting. And helping with that decision, Ryan Gedney, a senior labor economist at the Colorado Department of Labor and Employment, has consistently argued employment growth this year will end up much stronger than initially reported. Revisions for the first two quarters so far are backing up his view.

That said, layoff announcements have been rising in Colorado as the year comes to an end. DISH Network, which has been expanding rapidly to build out a new national cellular network, last month announced it would let go of 499 workers in Littleton and Englewood.

Broadcom announced it would cut about 2,800 jobs at VMWare following an acquisition of the company. That number includes 184 workers in Broomfield, according to a letter filed on Nov. 27 with the Colorado Department of Labor and Employment.

VF Corp., a sportswear and footwear maker behind several top brands, said at the start of the month it would let go of 500 employees, including just under three dozen at the company’s headquarters in Denver.

Some of the strongest hiring this year has come at local governments and at hotels and restaurants, which aren’t the highest-paying places in terms of wages, said Richard Wobbekind, an associate dean and a senior economist at Leeds.

The strongest job gains next year are forecast to come in professional and business services, where positions are mostly on the upper end of the pay scale. Education and health care should contribute to employment growth, and governments are expected to keep hiring, aided on the local level by higher property taxes.