User ID:  

Enroll Now | Forgot Password?

Company ID:  
User ID:  

Forgot Password?

Enter Here

arrowVectra Bank Media Room
arrowStrength and Stability of Vectra Bank
arrowPolicies and Terms
arrowZions Fact Sheet
arrowContact Us

Apply now for a Business Flex Checking Account!

Apply now for a Business Interest Checking Account!

Apply now for a Business Loan!

Denver Small Business

Vectra Bank Colorado Small Business Index for Colorado
August 2011 Release

September 8, 2011

Written by Jeff Thredgold, President, Thredgold Economic Associates
Economic Consultant to Vectra Bank Colorado



  • The Vectra Bank Colorado Small Business Index for Colorado measured 114.0 in August 2011, up from a revised 113.8 in July 2011
  • Colorado’s unemployment rate was estimated at 8.5% in the latest month, unchanged from the prior month’s rate.  Total employment grew by 18,600 jobs during the past 12 months
  • The Colorado economy’s thousands of small businesses have rebounded reasonably well from the state’s most painful recession since the Great Depression.  Unfortunately, Colorado being part of a struggling American economy won’t help much in coming months
  • The U.S. economy saw no net change in estimated employment during August, the weakest performance in 11 months, and sharply below expectations of a 60,000 job rise.  In addition, estimated job gains of the two prior months were revised lower by 58,000 jobs.  The U.S. unemployment rate remained at 9.1%

The dismal employment report for August will support those who see the U.S. economy now in, or soon to enter, recession.  More optimistic views see the U.S. economy barely moving forward, despite massive amount of fiscal and monetary stimulus.

The U.S. Labor Department’s Bureau of Labor Statistics reported on September 2 that the U.S. economy saw no change in total estimated employment during the month of August.  Forecasting economists had a consensus expectation of 60,000 net new jobs. 

Adding insult to injury were downward adjustments to estimated job gains of the two prior months, totaling 58,000 jobs.  In addition, the average work week fell slightly, while the average hourly wage also declined.  The nation’s unemployment rate remained at the painful 9.1% level.

We have made the case for many months that the severe political gridlock in the nation’s capital would damage the American economy.  Confidence levels of businesses and consumers have been impaired, leading to lesser hiring by businesses and weaker spending by consumers. 

The highly emotional debt ceiling increase debate in Washington, the downgrading of the quality of the nation’s outstanding debt by Standard & Poor’s, severe stock market gyrations, and rising anxiety about the European debt situation all tarnished confidence levels in August, contributing to the extremely poor jobs report.

Business leaders and consumers have great anxiety about the direction this nation is headed.  Confidence levels in both major parties have been declining.  The unwillingness of both major parties to set politics aside and focus on America’s economic and financial challenges has moved more and more businesses and consumers to the economic sidelines.   

Data for 2011’s first half vividly illustrates the nation’s economic weakness.  Second quarter 2011 GDP (gross domestic product, the sum total of all goods produced and services provided on U.S. soil) was revised lower from an already weak 1.3% real (after inflation) annual rate to 1.0%.  Such weak performance, combined with the anemic 0.4% real annual growth pace in 2011’s first quarter, saw a dismal 0.7% real annual growth pace in the first half. 

Most economic forecasters have reduced their expectations of U.S. economic growth over the next 12 months.  More pessimistic forecasters see another economic downturn about to unfold or already underway.

Colorado’s small business sector is directly impacted by what happens around the nation and around the world.  Rising investor anxiety and volatile stock prices damage business and consumer confidence even further, hurting business prospects within the small business sector.

The level of U.S. economic performance is a component of the Small Business Index, as are global and regional U.S. forecasts of economic growth.  Weak performance and/or downward revisions to such forecasts pull the Index lower.


The Colorado unemployment rate—the most heavily weighted component of the Vectra Bank Colorado Small Business Index for Colorado—was estimated at 8.5% in the most recent month, unchanged from the rate of the prior month.  The 8.5% rate compares to the 8.8% rate 12 months ago.  A lower Colorado jobless rate is a negative contributor to the Index as it suggests decreased access to labor for small businesses. Other associated factors typically tied to a lower unemployment rate, such as greater job creation, greater income gains and higher retail sales, pull the Index higher.

The state’s unemployment rate averaged 8.9% during 2010, 8.3% during 2009, 4.9% in 2008, 3.7% in 2007, and 4.3% in 2006.  Colorado’s jobless rate averaged 4.6% between 1990 and 2005.

The last 12 months saw an estimated increase in Colorado employment of 18,600 jobs.  This increase compares to a revised gain of 16,200 jobs in the prior year-over-year period.  Colorado lost 25,500 jobs in 2010, lost 104,700 jobs in 2009, added 19,000 jobs in 2008, added 52,200 jobs in 2007, and added 53,100 jobs in 2006.   

These job totals compare to gains averaging 46,500 net new jobs annually between 1990 and 2005.   More recently, job gains leading to greater income creation and stronger retail spending, have a positive impact upon Colorado’s small businesses…and therefore, the Index.

The Vectra Bank Colorado Small Business Index for Colorado was 114.0 in August 2011, up from a revised 113.8 in July 2011.  The Index measures business conditions from the viewpoint of the Colorado small business owner or manager. 

A lower Index number is associated with less favorable business conditions for Colorado’s small businesses.  The Index uses 100.0 for calendar year 1997 as its base year.  The Index also includes revisions to various historical and new forecast components as they become available.

Colorado Small Business Index


The U.S. Department of Labor reported no net change in August 2011 employment, much weaker than the 60,000 net gain expected.  In addition, estimated job gains of the two prior months were revised lower by 58,000 jobs.
The U.S. unemployment rate remained at 9.1% in August, matching July’s rate.  The current 9.1% jobless rate compares to the 9.6% rate of one year ago, the 9.7% rate of August 2009, and the 6.1% rate during August 2008. 

Goods producing employment dipped by 3,000 jobs in August, with losses in manufacturing (down 3,000 jobs) and construction (down 5,000 jobs) more than offsetting a rise in mining & logging employment (up 5,000 jobs).  Private sector service providing employment rose by 20,000 jobs in August, led by gains in education & health services (up 34,000 jobs) and professional & business services (up 28,000 jobs).  The information sector lost 48,000 jobs, most tied to a Verizon strike by 45,000 workers, which has now been settled.  Overall government employment fell by another 17,000 jobs during the month.

The U.S. economy suffered a net decline of 3.6 million jobs during 2008, the worst year since 1945.  The net loss of 5.1 million jobs during 2009 easily surpassed the 2008 total.  The American economy added 940,000 net new jobs during 2010, or 78,000 per month.  We estimate a net gain of just below 1.3 million jobs during 2011, with most of the gain during the first six months.  Roughly 130,000 net new jobs need to be added monthly just to meet the needs of a rising population, and just to keep the unemployment rate stable.

Jeff Thredgold
Thredgold Economic Associates
Economic Consultant to Vectra Bank Colorado

© Copyright 2011 Thredgold Economic Associates