Colorado holds strong as a top state economy
The best U.S. state economies are in the western states and Colorado is a solid No. 4, according to a recent study by 24/7 Wall St. This is helping to buoy the housing market, which has seen an edge in housing recovery.
To determine the states with the best and worst economies in the years leading up to the pandemic and during it, 24/7 Wall St. created an index of four measures — economic growth, employment growth, the poverty rate and the unemployment rate.
Before the pandemic, Colorado’s economic and job growth was among the top nationwide. For eleven years – from 2008 to 2019 – Colorado was in the top five states for job creation, according to economic reports by Cu-boulder Leeds Business Research Division.
The state also reported stronger than average gross domestic product (GDP) growth, driven partially by a rising information industry, and professional, scientific and technical services, reports 24/7 Wall St. Five year average annual economic growth in Colorado from January 2015 through January 2020 was 2.9 percent – the sixth highest in the nation. During that period, Boulder, Colorado Springs and Denver attracted new offices and second headquarters of tech giants Apple, Facebook and Netflix.
Nationwide, employment has fallen in the last five years. But in Colorado, employment climbed by an average of 0.9% annually over the same period, which is the nation’s fifth highest. Then in June 2020, the coronavirus pandemic showed its effects with the state’s unemployment rate climbing to 10.5% – the nation’s 17th highestm – a distinct change from the state’s previously low unemployment rates of less than 3%. In the fourth measure – the poverty rate – Colorado had the seventh lowest.
Before the pandemic, nationwide unemployment was at historic lows and GDP had grown for the longest consecutive period in history. The U.S. economy is predominately consumer driven – 24/7 Wall St. reports that consumer spending accounts for 70% of spending. The shutdown that accompanied the coronavirus dramatically slowed consumer spending and caused the U.S. to lose millions of jobs.
While western states held up to post-pandemic pressures better than others, in nearly every state the June unemployment rate is higher than the same time a year ago. States most affected have a larger share of industries taking the hardest hit from the pandemic – industries including airlines, conventions, tourism, food service, and oil extraction.
Here are the top five states with the best economies in the U.S.
1. Utah
• 5 year annualized GDP growth rate through Q1 2020: +3.4%
• 5 year annualized employment growth rate through June 2020: +2.4%
• June 2020 unemployment rate: 5.1%
• Poverty rate: 9%
2. Idaho
• 5 year annualized GDP growth rate through Q1 2020: +2.8%
• 5 year annualized employment growth rate through June 2020: +2%
• June 2020 unemployment rate: 5.6%
• Poverty rate: 11.8%
3. Washington
• 5 year annualized GDP growth rate through Q1 2020: +3.9%
• 5 year annualized employment growth rate through June 2020: +1.3%
• June 2020 unemployment rate: 9.8%
• Poverty rate: 10.3%
4. Colorado
• 5 year annualized GDP growth rate through Q1 2020: +2.9%
• 5 year annualized employment growth rate through June 2020: +0.9%
• June 2020 unemployment rate: 10.5%
• Poverty rate: 9.6%
5. Maryland
• 5 year annualized GDP growth rate through Q1 2020: +1.6%
• 5 year annualized employment growth rate through June 2020: -0.3%
• June 2020 unemployment rate: 8.0%
• Poverty rate: 9.0%
To determine the states with the best and worst economies, both in the years leading up to the pandemic and during it, 24/7 Wall St. created an index of four measures – economic growth, employment growth, the poverty rate, and the unemployment rate. Data came from the Bureau of Economic Analysis, the Bureau of Labor Statistics, and the U.S. Census Bureau.
Read the full report and get additional information at: 247wallst.com/specialreport/2020/08/25/the-states-withthe-best-and-worst-economies-4.
Tom Kalinski is the broker/owner of RE/MAX of Boulder, the local residential real estate company he established in 1977. He was inducted into Boulder County’s Business Hall of Fame in 2016 and has a
40-year background in residential and commercial real estate. For questions, e-mail tomkalinski33@gmail.com, call 303.441.5620 or visit boulderco.com.