Colorado’s strong labor force participation rate, new business filings and declining unemployment have state economists optimistic about continued recovery in the fourth quarter and 2022, according to a report issued Thursday by the Colorado secretary of state and the University of Colorado Boulder.

“Today’s report illustrates that Colorado’s economy continues to improve. The state’s GDP (gross domestic product) has increased 11.8% year-over-year, returning to pre-recession levels,” said Secretary of State Jena Griswold. “Colorado’s unemployment rate has also improved in September 2021 and the state’s labor force grew by 3.9%.”

The report Griswold referenced is the Quarterly Business and Economic Indicators for Q3, prepared by the Leeds Business Research Division at CU Boulder in conjunction with the Secretary of State’s Office.

It shows Colorado added 102,100 jobs between September 2020 and September 2021, and the state’s unemployment rate improved to 5.6%, though that’s still above the national unemployment rate of 4.8%.

“COVID variants, inflation, supply chain constraints and worker shortages remain concerns for many businesses and consumers,” Griswold said.

Some quick factoids from the report:

• The national GDP slowed to an annual rate of 2% in Q3, and prices increased sharply. It had been 6.3% and 6.7%, respectively, in Q1 and Q2.
• In Colorado, home price growth increased 13.8% from Q2 2020 to Q2 2021. That pace is the 12th-fastest in the country.
• Retail gasoline prices also increased 58% year-over-year. The average cost per gallon in Colorado on Oct. 25, 2021, was $3.64.

“GDP growth decelerated in the third quarter,” said Richard L. Wobbekind, associate dean for business & government relations, senior economist and faculty director of the Business Research Division. “This, of course, led a lot of forecasters to tone down their forecasts for 2021 to about 4.5%, where many were above 5%. … We’re really hopeful that the fourth quarter, and first quarter of 2022, will remain relatively strong in terms of carrying the economic recovery forward.”

Wobbekind said consumer confidence has been shaken a bit with rising housing prices, retail and inflation concerns.

“Consumer confidence, while not a good monthly predictor of consumption, is a pretty good long-term predictor,” he said.

The state’s labor force participation ranked fourth in the country, and remained “incredibly high,” Wobbekind said.

“While it doesn’t help with the unemployment rate, it certainly helps with long-term economic growth in the state,” he said.

The state’s new business filings dropped in Q3 to just over 12,000, down from historic highs in Q1 and Q2 that were near 16,000.

“Some of that may have been really enhanced by some of the fiscal stimulus that was out there encouraging new businesses to form at the state and national level,” Wobbekind said. “The third quarter always has a seasonal effect, a downturn that’s related to seasonality.”

Brian Lewandowski, executive director of the Leeds School of Business Research Division, said there were other hopeful signs in the report.

“In terms of employment recovery, we’re doing way better than we did during the Great Recession,” he said. “At this point in the Great Recession, this many months into it, we hadn’t even hit bottom yet.”

Surprisingly, state foreclosures are down, as are bankruptcies, Lewandowski said. “We expected those to spike during the recession, but they didn’t.”

“Of the top 30 taxing jurisdictions in Colorado, 28 of them have sales taxes above, even way above, where they were at in 2019,” he said. “That’s just another of those indicators we look at that shows that there is this broader recovery around the state. It’s not just isolated to a couple of areas.”