Report: State’s economic recovery from COVID-19 has slowed
BISMARCK, N.D. (AP) — A new quarterly report from North Dakota State University says the state’s economic recovery from the coronavirus pandemic has slowed a bit.
The outlook predicts declines in the gross state product which is the measurement of the state’s output, labor force participation and total wages and salaries.
Colorado economic recovery picking up steam but employers still struggling to staff up
On Friday afternoon, Jay Roberts, the general manager for Empower Field at Mile High was waiting to hear the latest from concessions contractor Aramark about how the company planned to get 160 workers over the Rockies and into Denver.
The employees, slated to be bused in from the Western Slope to work the Denver Broncos preseason game on Saturday night, lost their ride after a busing company said they couldn’t take them.
“Every time you feel pretty good something happens that will make you a little less comfortable,” Roberts said about getting staffed up for the 2021 football season after COVID-19 restrictions limited capacity at the stadium last year.
Hiring is picking up in Colorado. But even as federal unemployment benefits come to an end and the number of people seeking work in the state remains higher than the national average, employers, especially those in the hospitality industry, are struggling to fill holes.
In December, the Colorado Business Economic Outlook predicted employers in the state would add 40,500 jobs this year, a 1.5% growth rate so sluggish it would delay a recovery in all the jobs lost during the pandemic until some time in 2023.
But the strong rollout of COVID-19 vaccines this year, combined with a heavy flow of federal dollars, is allowing the Colorado economy to rebound faster than expected. The same group of experts, who met last month, boosted the forecast to 89,000 jobs or a growth rate of 3.4%, with gains coming in nearly every industry.
“When we did the forecast in December the uncertainty of the virus was still very high. We really didn’t have a sense as to when the service economy would come back,” said Richard Wobbekind, a senior economist and associate dean at the University of Colorado Boulder Leeds School of Business.
“The vaccination rollout was sooner than anticipated. The No. 1 reason for the stronger recovery is the vaccine,” he said.
The boost to consumer confidence that came with vaccination combined with low interest rates and strong federal fiscal stimulus to fuel the strong rebound, Wobbekind said. But he cautioned that the current delta wave of infections and rising inflationary pressures remain headwinds.
Right now, hiring is so strong that employers face labor shortages, something unimaginable during March and April of last year when the state shed 367,300 jobs as government-ordered business closure to contain the outbreak caused consumer demand to fall off a cliff.
That 13.3% drop was modestly better than the declines suffered in many states, but it pushed Colorado’s unemployment rate from 2.7% in February of last year to 12.1% in May. The original forecast had called for the state’s unemployment rate to average 6.7% this year, but it has been below that level all of this year and was at 6.1% in July.
The tight labor market has caused Roberts and his team at Empower Field to take special steps. On Thursday, he put out a statement on the stadium Twitter account, highlighting that the venue is facing “the potential for significant labor shortage and supply chain issues.” In response, it is paring back its food menu to try to limit wait times for fans. That’s just one step being taking at the stadium to mitigate staffing shortage, he said.
Empower Field at Mile High is faced with the potential for significant labor shortages and supply chain issues. We will be temporarily streamlining menu items to minimize the wait time and impact this will have on fans. pic.twitter.com/EHxj95fBEq — Empower Field at Mile High (@EmpowerField) August 26, 2021
For the first time in years, the stadium also took out now-hiring ads, Roberts said.
“Each department is a little bit short of where we would like,” Roberts said. “In the past, we have had more people apply than we needed because people want to be part of Broncos Country.”
Colorado’s unemployment rate ranks 36th overall among states in July, which is down from the top 10 low-ranking the state has enjoyed. Wobbekind said it probably wouldn’t be until after 2022 when the state is again a leader for full employment.
One reason that Colorado has a more elevated unemployment rate is that a higher share of residents are out actively looking for work than seen in other states. Wobbekind said if the U.S. economy had a similar labor force participation rate as Colorado, its unemployment rate would be above 7% rather than at its current of 5.4%.
Even with all those job seekers, employers are having to boost their offerings to get attention.
At the Kimpton Hotel Monaco Denver downtown, general manager Don Swedberg said the company is offering signing bonuses for key positions and increased pay for others. Kimpton has also doubled referral bonuses for staff, offering up to $500 if an employee refers someone for a management position.
The hotel and its in-house restaurant Panzano had 54 employees as of Friday. That’s down from 143 when Swedberg came on in October 2019.
Demand isn’t back to the level necessary for that many workers but the team there now is having to stretch and pick up extra tasks. Even management is pitching in on room cleanup, Swedberg said.
“Like everybody everywhere else, it has been a challenge for us to recruit,” he said. “Areas like housekeeping, we would need an additional six to 10 staff just to be at the level we would need to take care of the demand we are currently seeing.”
Applications are picking up of late. Swedberg’s not ready to speculate about if the end of federal unemployment benefits is driving that.
“In speaking with colleagues across the country, that’s something we have discussed and we are hopeful,” he said.
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4 Some small question marks about the industrial job market recovery
The bounce back in employment has been very strong in recent months as economies reopened, which has been an encouraging sign for the sustainability of the recovery. Today’s release does reveal a downturn in employment expectations from industry, which begs the question whether this is because of the limited availability of qualified workers or because labour demand has been fulfilled. We expect it to be the prior given continued strong demand for goods, but labour shortages could also cause the job market recovery to go into a lower gear. For services, employment expectations have peaked at a historically high level, indicating that demand for workers remains strong as the economy continues to recover from the corona crisis.