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Denver Small Business

Vectra Bank Colorado Small Business Index for Colorado
March 2011 Release

March 10, 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 121.5 in March 2011, up from a revised 120.6 in February 2011
  • Colorado’s unemployment rate was estimated at 9.3% in the latest month, up from the prior month’s 9.1% rate.  Total employment grew by 13,800 jobs during the past 12 months
  • Stronger gains in total personal income across the state and across the nation will benefit the small business sector
  • The U.S. economy added an estimated 216,000 net new jobs in March, slightly exceeding economists’ consensus forecast.  The U.S. unemployment rate dropped to 8.8%% in March, versus February’s 8.9% rate.  The full one-percent drop in the unemployment rate during the past four months is the largest four-month decline in 27 years.  Solid employment gains as measured within the household survey accounted for much of the decline


The Great Recession officially began in December 2007 and ended in June 2009.  The 18-month downturn was the longest, deepest, most costly, and most pervasive since the Great Depression.

One positive result of seven consecutive quarters of renewed U.S. economic growth is the rebound in total personal income across the nation.  Total personal income includes three major components, according to the U.S. Bureau of Economic Analysis.  These include earnings, property income, and personal current transfer payments (primarily from government).  All three components grew during 2010, while only transfer payments rose during 2009.

Fluctuations in total personal income across the Intermountain area were largely in line with changes across the nation.  For reference, state total personal income growth nationwide in 2010 ranged from a meager 0.3% in still recession-impacted Nevada to a more robust 4.2% in New Mexico. 

Modestly stronger gains in total personal income are likely for most states during 2011, assuming no major external shocks impair U.S. economic growth.  Even stronger gains are likely during 2012 and 2013 as job gains and income gains are expected to return to more traditional levels.

The pace of personal income growth is a component of the Colorado Small Business Index.  Stronger income gains typically lead to stronger retail spending, also a component of the Index.


The Colorado unemployment rate—the most heavily weighted component of the Vectra Bank Colorado Small Business Index for Colorado—was estimated at 8.8% in the most recent month, unchanged from the 8.8% rate of the prior month.  Because of annual baseline revisions, new data was not available at the time of this writing.  The 8.8% rate compares to the 7.4% rate 12 months ago.  A higher Colorado jobless rate is a positive contributor to the Index as it suggests increased access to labor for small businesses. Other associated factors typically tied to a higher unemployment rate, such as lesser job creation, lesser income gains and lower retail sales, pull the Index lower.

The state’s unemployment rate averaged 8.0% during 2010, 7.7% during 2009, 4.9% in 2008, 3.9% in 2007, and 4.4% 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 5,200 jobs (up 0.2%), matching the prior month.  Colorado lost 50,000 jobs in 2010, lost 106,300 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.  Until the most recent period, job declines, leading to slower income creation and weaker retail sales, have had a negative impact upon Colorado small businesses…and therefore the Index.

The Vectra Bank Colorado Small Business Index for Colorado was 121.5 in March 2011, up from a revised 120.6 in February 2011.  The Index measures business conditions from the viewpoint of the Colorado small business owner or manager. 

A higher Index number is associated with more 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 a net gain of 216,000 jobs in March 2011, stronger than the 180,000 net gain expected.  The rise of 230,000 jobs in the private sector was also slightly stronger than expectations. 

The U.S. unemployment rate dropped to 8.8% in March, versus February’s 8.9% rate.  The decline from November’s 9.8% rate to 8.8% in March was the largest four-month decline since 1984.  A strong gain in new job creation within the household survey (from which the unemployment rate is derived) accounted for most of the rate decline in recent months.  The current 8.8% jobless rate compares to the 9.7% rate of one year ago and slightly exceeds the 8.6% rate of March 2009. 

Goods-producing employment rose by 31,000 jobs in March.  Manufacturing employment rose by 17,000 positions.  Construction lost 1,000 jobs, while mining and logging employment rose by 15,000 jobs.

Private-sector service-providing employment rose in March by 199,000 positions.  Professional & business services added 78,000 jobs, while retail trade added 18,000 jobs.  Transportation & warehousing employment was unchanged, while wholesale trade added 14,000 jobs.  Financial activities employment rose by 6,000 positions.  The education & health services sector added 45,000 jobs, while leisure & hospitality added 37,000 jobs.  Overall government employment fell by 14,000 jobs during the month, tied to weakness at the state and local level.

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 most recent recession was the first since the Great Depression to see all net job gains of the prior expansion eliminated.

The American economy added 940,000 net new jobs during 2010, or 78,000 per month.  We estimate a gain of 2.4 million net new jobs during 2011.  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.


The April 2011 Vectra Bank Colorado Small Business Index for Colorado will be released on May 12, 2011.

Jeff Thredgold
Thredgold Economic Associates
Economic Consultant to Vectra Bank Colorado

©Copyright 2011 Thredgold Economic Associates