While fears of a nationwide recession have eased, Colorado’s economy faces its own set of hurdles in 2024. The Office of State Planning and Budgeting predicts a “soft landing” for the national economy, but there are several risks on the horizon that could still derail our state’s growth.
Retail Blues and Housing Woes
Consumers are still spending, but for how long? Spending fueled the economy in 2023, but with high inflation and slowing income growth, that trend can’t continue forever. In fact, Colorado is already seeing a slowdown in retail sales.
Housing prices are another headache. Homeownership becomes an impossible dream for many as prices outpace incomes. This disproportionately affects minority communities, and rising housing costs are actually contributing to the retail slowdown as families tighten their belts.
Jobs Picture Gets Cloudy, Global Tensions Loom
The resilient labor market is showing signs of cooling. More workers are being laid off, and fewer are voluntarily leaving their jobs – a potential warning sign. Workers in manufacturing, information, and finance could be particularly hard hit.
Geopolitical tensions are another wildcard. The ongoing war in Ukraine, conflicts in the Middle East, and supply chain disruptions could jolt the global economy, sending ripple effects into Colorado. These events could significantly worsen inflation and cause fuel prices to skyrocket.
Debt: The Silent Threat
Household debt is ballooning, with credit card delinquencies rising. Younger and lower-income Coloradans are particularly vulnerable, especially those without the cushion of homeownership. This rising debt could have a chilling effect on consumer spending as people struggle to repay what they owe.
The Bottom Line for Coloradans
State officials remain cautiously optimistic about Colorado’s economic outlook but warn that continued growth isn’t guaranteed. The combination of these risks could still trigger a downturn. While some industries might thrive even in that scenario, others could stumble, leaving many feeling all the pain of a recession.