What does 2012 hold for Colorado?

• Author: Adams, Tucker Hart
• Position: The ECONOMIST

I'M ENCOURAGED WHEN I READ THE ECONOMIC consensus is that growth will be really slow in 2012, much slower than the consensus expected six months ago. That's because, in my 35 years of forecasting, I've found that the consensus is almost always wrong.

It's not going to be a great year. But it will be a better one than we've seen for quite some time. One of my personal indicators is whether economic data are being revised up or down. The upward revision in the employment figures, both nationally and in Colorado, is good news. Over the years, when I've been asked what to watch if you only have time to pay attention to one economic statistic, this is what I tell people to focus on.

Employment in the U.S. at the end of 2011 was about where it had been in April 2000, at the end of the long 1990s expansion. Yet there were 11 million more people in the labor force last year, either working or looking for jobs. The labor force participation rate (the percentage of people 16 and over in the labor force) had fallen by over three percentage points; these are the discouraged workers who've given up job hunting.

After employment peaked in April 2008, we shed almost 9 million jobs in a little more than two years. We've only regained 2.5 million of them, an even poorer performance than the national economy. No wonder the Great Recession felt so awful!

Colorado followed a similar path. Year-end 2011 employment was at the same level as year-end 2000. We lost 151,000 jobs between April 2008 and January 2010. In the next two years we regained only about a quarter of them.

The signs of slow, steady job growth are all around us. I see a lot of help-wanted signs in stores and restaurants. Temporary hiring is up, usually a leading indicator of permanent hiring. Housing starts in metro Denver, Colorado Springs and Fort Collins are up, albeit from a very low base, which means more construction industry jobs.

One place we didn't see an upward revision in data is in the home sale statistics. It turns out the housing recession was even worse than originally reported, no surprise to anyone who needed to sell a home over the last five years. I think the good news here is that it can't get much...