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Springs nearly nation's worst in unemployment change over past year

March 11, 2011

Colorado Springs ranked second-worst in the nation for its rising unemployment rate last year, according to a report Monday from the Brookings Institution ranking the nation’s 100 largest metropolitan areas on a variety of economic indicators in the fourth quarter of 2010.

Colorado Springs ranked 99th out of the top 100 metro areas in the change in the unemployment rate over the last year, Brookings’ quarterly MetroMonitor report found. The only city with a worse job performance over the last year was Las Vegas. Adding insult to injury — or perhaps a silver lining, depending on your perspective — Colorado Springs’ economic output appears to be rebounding strongly from the recession. It’s just not creating any jobs in the process.

The Springs' unemployment rate rose 1.5 percentage points in the last year, according to Brookings’ data. The national average for the top 100 metro areas was a 0.4 percent decline in the unemployment rate from late 2009 (The report doesn’t cover January, when the local unemployment rate reached a record 10.2 percent, with more than 31,000 people in the area unemployed.)

The numbers aren’t quite as grim when the change is measured over three years — by that measurement, the Springs ranked 64th in the country with a 4.3 percent rise in the unemployment rate.

That’s a common pattern across the Intermountain West states, said Jonathan Rothwell, a senior research analyst with Brookings: The recession hit most of the region’s metros areas later than the rest of the country.

“You do have to remember that Colorado Springs and some of its neighbors in Colorado and Utah started the recession about a point or two below the national average in unemployment,” Rothwell said. “As a rule, the Intermountain West metros have been able to stay below the national average in employment rates.”

The study found that the unemployment rate had fallen from December 2009 to December 2010 in 65 of the 100 largest metropolitan areas.

Colorado Springs highest ranking in any of the categories the report looked at was its rebound in economic output. The area had the 16th best improvement in gross metropolitan product, 5.9 percent, measured from the lowest point of the recession in late 2008. That’s significantly higher than the national average of 4.2 percent.

The Springs’ economic rebound has been driven by the military, said Fred Crowley, senior economist for the Southern Colorado Economic Forum. Without thousands of soldiers moving to Fort Carson, the local economy would truly be in a tailspin and as many as 8,000 more people would be unemployed, he said.

“There is no job growth happening in the private sector,” Crowley said.

A related Brookings report looking at the states of the Intermountain West said that Colorado Springs, along with Denver, Salt Lake and Ogden, Utah, “experienced some of the swiftest recoveries in the nation.”

Rothwell said he was as in the dark as anyone about why some cities’ economies are recovering and others aren’t.

“We haven’t been able to find any strong pattern across metros that explains recovery,” he said. “It almost seems random which ones have recovered and which ones haven’t.”

However, Rothwell said, the lagging unemployment rates are something that’s been seen in the past in other countries that faced similar housing busts.

“There is a lag in job growth that we haven’t seen in the last two recessions,” he said. “If you look beyond the U.S. borders, these kinds of housing bubbles and recessions do take  number of years to recover from.”

Crowley said the Springs needs to attract new private-sector jobs, but there’s no simple way to make that happen.

“It’s easier said than done: All we need to do is get more manufacturing,” he said. “The whole world wants those jobs.”

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