Despite a series of mixed or muddled messages, Colorado’s economy remains in strong recovery mode with the number of jobs here exceeding pre-pandemic levels, unemployment continuing to decline and strong gross domestic product growth, according to a report released Tuesday.

The Quarterly Business and Economic Indicators report covers the first quarter of 2022 and is prepared by the Leeds Business Research Division at the University of Colorado Boulder with data from the Colorado Secretary of State’s Office.

“It’s a mixed story and the data is muddled, sending mixed indicators – as often is the case,” said Brian Lewandowski, executive director of the Leeds School of Business Research Division.

Colorado unemployment rate falls again in March

First, the good news: Colorado’s job recovery took the state above pre-recession levels in February 2022.

“In Colorado, 375,200 job losses were recorded from February to April 2020, but 389,400 jobs were added back from May 2020 through March 2022,” according to the report. “Colorado’s March 2022 employment was 14,200 (0.5%) above the pre-recession peak in January 2020.”

Colorado’s unemployment rate stood at 3.7% in March, the lowest level since February 2020, right before the pandemic, when the state’s jobless rate was 2.8%. The national unemployment rate was 3.6% in March.

Industries with the strongest recovery included leisure and hospitality – which was hit the hardest with forced pandemic shutdowns – and professional and business services. But five of the 11 main industries that drive the state economy were still below pre-recession employment levels.

Survey says: Colorado business leaders cautiously optimistic

New business filings increased 23% from the fourth quarter, which is typical for the first quarter of every year, but slipped 2.1% year-over-year in the first quarter. Lewandowski said the first quarter of 2021 saw a record number of new business filings in the state, so it’s hard to tell if Q1 of 2022 just dipped from that record level or points to a real trend. Quarterly filings totaled 43,780.

“The mixed message for new entity filings, and existing renewals being up and really strong, is that we also saw in an increase in delinquencies and dissolutions,” Lewandowksi said. “That shows there’s some business strain out there in the Colorado economy.”

State records show 12,831 businesses dissolved in Q1 2022, a 20.4% increase from the same quarter in 2021, and a 12.9% increase from Q4.

That’s likely because the federal government helped prop up small businesses earlier in the pandemic through Paycheck Protection Program loans, Lewandowksi said. 

“We’re not at a point of great concern, when that information is coupled with the entities in good standing and existing entity renewals,” he said.

Report: Colorado economy in ‘recovery mode’

While the nation recorded the highest top-line inflation in four decades, prices in the Denver-Aurora-Lakewood metropolitan statistical area spiked even higher to a 9.1% year-over-year increase in the consumer price index in March. The national average was an 8.5% increase.

“Concerns remain about the supply chain, inflation, the war in Ukraine, workforce issues,” Lewandowski said. “There’s a lot of real concerns by businesses and individuals out there.”

Another glimmer of hope came from increasing food and energy costs, in that they’re still high but were “increasing at a decreasing rate in the last couple of months,” Lewandowski said. “When commodity-driven prices stabilize, we’ve seen inflation come down.”

“Colorado continues to outpace the nation in gross domestic product (GDP), employment, income and labor force,” the report states. “State GDP increased 6.3% year-over-year in Q4 2021 and per capita personal income was $69,113 in February.”

The U.S. annual real GDP grew at 5.7% in 2021 – the fastest annual pace of growth since 1984.