Colorado's "precarious" economic picture, by the numbers - Axios DenverLog InLog InAxios Denver is an Axios company.

What to know about Colorado' s precarious economy

Illustration: Sarah Grillo/Axios Two new forecasts offer a cautionary outlook on the direction of Colorado's economy after years of sustained growth. State of play: Greg Sobetski, the Legislature's chief economist, called the current economic landscape "precarious" in a recent presentation to lawmakers. The state's economy is moving into a transition period, economists said.For the first time in more than a decade, Colorado's economic growth is expected to plateau. The state budget's discretionary spending — the bulk of tax collections — is expected to see growth near 1% for the next two years before it expands to 4% in fiscal year 2024-25. Details: Here are three dynamics — and data points — economists for the and highlighted in a recent presentation:Image courtesy of the Office of State Planning and Budgeting 1. Risk of recession: The possibility of a recession in coming months is growing as rising interest rates and surging costs work to suppress consumer spending.In terms of real growth adjusted for inflation, the Polis administration's economists expect it to in 2023.Colorado could fare better in a downturn because of the economy's reliance on service sectors, the governor's chief economist Bryce Cooke said. 2. Job growth will slow: The current labor market is strong, economists agree, and employment is at pre-recession levels, despite gaps for certain industries.Demand for workers is expected to slow given the economic headwinds. The governor's economists expect unemployment to average 3.5% for the year, slightly better than the 3.6% U.S. rate.In 2023, they believe the unemployment rate will rise to 4.3% in Colorado because of a tight labor market.Image courtesy of Legislative Council 3. Inflation is real: The latest data points suggest that inflation may have peaked, economist David Hansen said. Home prices — which are largely driving inflation in Colorado — are expected to level off.The Denver metro's rate could still exceed U.S. levels in 2023. Yes, but: Inflation is outpacing wage growth even as employers boost salaries amid competition.It's eroding consumer purchasing power, as real wages in the Denver metro declined 2.7% in August compared with the prior year. In Colorado, real wages declined 1.7%. Get more local stories in your inbox with .Subscribe Support local journalism by becoming a member.

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