In the latest survey conducted by CU Boulder economists, Colorado business sentiment took a dip due to concerns about interest rates and political uncertainty. Brian Lewandowski, the executive director of the Business Research Division at the Leeds School of Business at CU Boulder, noted that respondents are currently preoccupied with the election cycle and how it might impact their economic outlook. This sentiment is common around presidential elections according to Lewandowski.
Despite these concerns, businesses in Colorado reported feeling neutral about the economic outlook in the third quarter of 2024, scoring 50.6 in confidence according to the survey. While this is a decrease from the previous quarter’s score of 53.7, it is still much higher than the same quarter last year, which scored 44.1. Lewandowski pointed out that consumer demand in the state is still growing, with job postings exceeding the number of unemployed workers, indicating a continued need for workers.
Colorado business leaders remain more optimistic about the state economy compared to the national economy, a trend that has been observed in the survey results over time. This difference reflects the reality that Colorado’s economy generally performs better than the nation as a whole. Recent data shows that Colorado’s employment growth increased by 1.9 percent year-over-year in May 2024, placing it 15th in the nation. Personal income also rose by 4.8 percent in the first quarter of 2024, ranking the state 14th.
In addition to political uncertainty, high interest rates were reported as a concern by Colorado business leaders. The federal fund’s effective rate is currently higher than at any point in the last 20 years, and it is uncertain when the Federal Reserve will start cutting rates again. Some industries are experiencing job losses due to the high interest rates, such as mortgage brokers and bankers. Lewandowski pointed out that some sectors are expected to end the year with job losses, particularly those sensitive to interest rate changes.