Colorado has a strong economy that out performs other states’, according to the Governor’s Office of State Planning and Budgeting.

The office released the quarterly economic forecast reoirt Tuesday. It revealed  that the labor market in Colorado continues to lead across the U.S. with a lower unemployment rate and higher job growth rate than national numbers. The economy’s performance is expected to continue to stay strong, according to the report.

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Colorado’s unemployment level of 3.5% is still staying below the national unemployment rate of 3.7%. While unemployment is currently low, the demand for labor is higher than the labor supply, according to the report. The demand for housing is also currently above the supply, leading to rising rent costs.

Consumer spending patterns are headed towards services, so experts expect that to benefit the Colorado economy due to the larger share of service-related businesses. The labor market and consumer spending are exceeding previous expectations now, but consumer demand and economic growth are expected to decline in the second half of 2023.

“Colorado’s strong economy continues to outpace other states, with lower unemployment and more job growth here in Colorado than we are seeing nationally,” Gov. Jared Polis said in the news release. “As we enter the new year, we are committed to saving people money, creating more good-paying jobs, and attracting new businesses to our thriving state,” 

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The general fund revenue projections for the fiscal year 2021-22 are expected to have grown 23.7%, to $17.7 billion with income and sales tax revenues up to 20% or more, according to the report. The fiscal year 2022-23 projection is $412.4 million more than the September forecast due to cash from income tax returns, according to the report. The revisions will offset Proposition 121, the voter-approved ballot measure to lower the state income tax from 4.55% to 4.4%. In the fiscal year 2022-23, cash fund revenue is expected to fall 2%, but should grow in the following fiscal years.

In the case that a recession does occur, Colorado is expected to handle the impact better due to the resilience of service sectors.

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