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It can be difficult to wrap your head around exactly where the economy stands at the beginning of the back half of 2022.

Just how bad is the inflationary situation, and will the government’s response to it push the economy into a recession? What about these stellar job figures that seem to show the economy on fire? If more people than ever are employed, why is it as difficult as it has been in recent history to afford housing?

Colorado’s Quarterly Business and Economic Indicators report, compiled by the Colorado Secretary of State’s office and the University of Colorado Leeds Business Research Division and released Thursday, attempts to shed some light on the situation.

“The report paints a picture of a moderating economy both in Colorado and nationally,” said Rich Wobbekind, associate dean for business and government relations at the University of Colorado Boulder’s Leeds School of Business, but, “our view is that we are not in a recession at this time.”

Colorado’s June 2022 employment increased by 111,700 workers, growth was fueled in part by increased labor force participation.

The state’s “labor force participation rate ranked second-highest in June, totaling 69.5%, increasing above the pre-recession level,” the economic indicators report said.

Not all sectors have fully recovered from the pandemic and the report shows “signs of pessimism from the business community due to inflation, supply-chain disruptions, worker shortages and interest rates,” Colorado Secretary of State Jena Griswold said.

Colorado workers rank in the top 10 nationally for per capita income ($70,764) and income growth (0.3%).

Still, that income growth has failed to come close to matching inflation, and many Coloradans have struggled with rapid price increases in 2022.

This failure of wages to keep pace with prices comes amid a long stretch of labor market tightness, periods that tend to increase the relative power of workers.

A key housing-price index showed a Colorado increase of 21.6% from the first quarter of 2021 to the same period in 2022, the 14th-fastest pace in the country.

“Colorado was among 47 states that recorded a quarterly decrease in real (first quarter gross domestic product), falling at an annualized rate of 1.9%,” the report said. “However, Colorado’s real GDP growth persisted year-over-year, up 3.9%, ranking the state 15th” in the nation.

Total new entity filings increased 0.5% year-over-year. Colorado recorded a total of 39,464 new business entity filings in the second quarter of this year, filed in Q2 2022, most of which were LLCs.

In the second quarter there were 172,106 existing entity renewals, up 11% year over year.

It wasn’t all good news on the business-filings front. Delinquencies increased 9.8% year over year in the second quarter, and dissolutions jumped 27%, the report said.

“While Colorado’s resilience has been tested, today’s report … show(s) we’re moving in the right direction,” Griswold said. “Colorado’s economy continues to shine, even with the uncertainty at the national level.”

This article was first published by BizWest, an independent news organization, and is published under a license agreement. © 2022 BizWest Media LLC.

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