What next year holds for Colorado: slow job growth.

• Author: Adams, Tucker Hart
• Position: ECONOMIST

Every July for the past 30 years I've buried myself in my office to prepare the economic forecast released the Tuesday after Labor Day. For the next six weeks I would sort through the data, mull basic laws of economics that I learned in graduate school and think about what the people who had to meet a payroll every week told me, trying to tease out information as to what the next 18 months held for the Colorado economy.

I announced last September that the 2008 forecast was my 30th and my last. That was a good decision. But old habits die hard, and as I weed my garden or take my grandchildren to the rodeo, I find myself thinking about what the next year holds for Colorado.

In large measure, it depends on how the U.S. economy performs. With a bit of luck, the worst of the housing and financial market crises are behind us, although the problems with Fannie Mae and Freddie Mac give one pause. That leaves the consumer problem to be dealt with--debt, job losses, confidence, etc.

As long as I've been analyzing the Colorado economy, I've said that the bottom line is jobs. When the economy is creating jobs, when people can move from part-time to full-time positions or from lower paying to higher paying jobs, they can usually make their mortgage payments, provide for themselves and their family and are confident about the future.

When job growth stagnates or turns into job losses, it's not a healthy economy no matter what the gross domestic product data tell us. Think back to 2002 and 2003, which I characterized as the "Job Loss Recovery." When the Business Cycle Dating Committee announced the recession had ended in November 2001, people looked at me in disbelief.

"How can this be an economic recovery when companies are still eliminating jobs?" they said. (Colorado employment peaked in December 2000 at 2.24 million and then declined steadily to 2.14 million in June 2003, not returning to the previous employment peak until December 2005.)

Job growth in Colorado has been sluggish this year, 1.8 percent through May. Although we don't have state-level data, we know that even today many people who want and need full-time jobs are only able to find part-time work--5.4 million nationally, up 1.1...