{"id":63892,"date":"2018-07-29T15:54:53","date_gmt":"2018-07-29T21:54:53","guid":{"rendered":"https:\/\/dh.durangoherald.com\/tj\/economists-agree-slowdown-is-coming-but-not-on-when\/"},"modified":"2018-07-29T21:54:53","modified_gmt":"2018-07-29T21:54:53","slug":"economists-agree-slowdown-is-coming-but-not-on-when","status":"publish","type":"post","link":"https:\/\/dh.durangoherald.com\/tj\/economists-agree-slowdown-is-coming-but-not-on-when\/","title":{"rendered":"Economists agree slowdown is coming, but not on when"},"content":{"rendered":"\n

\"Colorado\u2019s
Colorado\u2019s economy has been booming for years, but several economists expect growth to slow over the next year.<\/span>Bill Sikes\/Associated Press file<\/span><\/figcaption><\/figure>\n<\/p>

COLORADO SPRINGS (AP) \u2013 The Colorado economy has been booming for years, but several economists expect growth to slow over the next year and fall into a recession by late 2019 or early 2020.<\/p>\n

Current economic statistics reflect strong growth, including unemployment rates that are nearly the lowest levels on record, payroll growth that is accelerating after slowing last year, housing construction at the highest levels since the most recent recession and consumer spending growing at rates well above inflation.<\/p>\n

But economists see mounting threats to continued growth that could trigger a downturn.<\/p>\n

\u201cIt is difficult to predict when the slowdown will come, but when you have this many variables pushing toward a recession, it makes a recession more likely and erodes confidence\u201d in the economy, said Tatiana Bailey, director of the Economic Forum at the University of Colorado at Colorado Springs. \u201cThe factors that point to a recession don\u2019t yet outweigh the factors that point to a continued expansion, so we aren\u2019t yet at a pivot point.\u201d<\/p>\n

Bailey said the state may become a victim of its own success. Employers are adding jobs faster than people are entering the job market, worsening the labor shortage. Many employers struggle to find qualified job candidates, and they\u2019re boosting wages and expanding recruiting efforts to fill openings.<\/p>\n

\u201cThere are already signs of increasing inflation, and I view those with trepidation,\u201d Bailey said. \u201cWhen you combine that with a slowdown in people entering the labor force, that will worsen inflation concerns. Along with trade issues and threats of tariffs, there is a growing chance of more interest rate increases that will reduce capital investment by businesses.\u201d<\/p>\n

The state\u2019s leading economic indicators show \u201csome steam left in this expansion,\u201d she said. But she expects a decline before 2020, as employers pass the cost of higher wages onto consumers, who likely will slow spending as a result.<\/p>\n

\u201cMy best guess is that a recession will start sometime next year, but we have higher-than-average factors that could accelerate\u201d the downturn\u2019s arrival, Bailey said.<\/p>\n

\u201cWe probably have six to nine months of coasting left\u201d in the current expansion, the second-longest on record.<\/p>\n

Tom Binnings, a senior partner in local economic research and consulting firm Summit Economics LLC, said the U.S. economy remains \u201cvery robust and strong, in part due to the fiscal stimulus from tax cuts\u201d enacted late last year. But, he said, \u201cIt wouldn\u2019t take a lot to bring on a recession. Anything that shakes or destroys business confidence would trigger a recession.\u201d<\/p>\n

While business investment has been strong in the first half of the year, Binnings said, an escalating trade war could shock the nation\u2019s economy and trigger a downturn. He also said immigration restrictions proposed by the Trump administration could make an already worsening labor shortage more acute and thus slow economic growth.<\/p>\n

Binnings said he expects slower growth for the state and U.S. economies into next year. He expects concerns about inflation to trigger higher interest rates, while uncertainty about trade policy and the Nov. 6 election will moderate growth in the second half of the year.<\/p>\n

\u201cMy forecast is optimistic. Certainly there are risks, but the expansion should keep going for at least another 12 months,\u201d Binnings said.<\/p>\n

Gary Horvath, a Broomfield-based economist who writes the cber.co economic research website, said the positive factors for Colorado\u2019s economy still outweigh the negative factors, but he agrees with forecasts by Bailey, the Governor\u2019s Office of State Planning and Budgeting and the Colorado Legislative Council, all of which project that the state and local economies will soften over the next 12 months.<\/p>\n

\u201cThe biggest negative is that companies are having trouble finding workers with a 2.8 percent unemployment rate. Every business is looking for workers,\u201d Horvath said. \u201cThat means that companies are missing out on business opportunities that they could take advantage of if they could find enough workers.\u201d<\/p>\n

Possible ballot initiatives that could restrict oil and gas exploration, along with escalating housing costs, also could slow the Colorado economy, Horvath said. But he said strong commercial development along the Front Range and Western Slope, a more diverse Colorado economy that isn\u2019t dependent on a single industry or sector and strong growth in consumer spending and the overall economy more than offset his concerns.<\/p>\n

\u201cA lot of (economists) see a recession in 2019 or 2020, but right now there seems to be too many moving pieces to say that,\u201d Horvath said. \u201cThere is a lot of concern over tariffs and trade, but the question is whether they are just for show and a negotiating tool or will they actually happen. There is a lot of talk, but in the end nothing could end up happening.\u201d<\/p>\n

The Colorado Legislative Council\u2019s latest forecast last month said the state and national economies \u201care firing on all cylinders and appear positioned to flourish in the near term.\u201d But the council also expects growth to \u201cslow significantly in late 2019 and 2020\u201d due to rising inflationary pressures and tighter labor markets.<\/p>\n

Colorado Economic Forecast (PDF)<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Colorado\u2019s unemployment rate is near a record low<\/p>\n","protected":false},"author":1,"featured_media":63893,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[],"tags":[29],"naviga_topic":[],"class_list":["post-63892","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","tag-newsletter"],"acf":[],"author_name":"dh_admin","_links":{"self":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/63892","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/comments?post=63892"}],"version-history":[{"count":0,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/63892\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/media\/63893"}],"wp:attachment":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/media?parent=63892"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/categories?post=63892"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/tags?post=63892"},{"taxonomy":"naviga_topic","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/naviga_topic?post=63892"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}