Indicators do not suggest recession is ‘imminent’ – Loveland Reporter-Herald

DENVER — Although economic growth is slower than in recent years during the post-COVID-19 recovery, economists at the University of Colorado Boulder say they don’t believe a recession is coming or even close.

That view is supported, they say, by the Colorado Secretary of State’s quarterly economic and business indicators report, which was released Monday for the second quarter of 2024.

The Centennial State’s real gross domestic product grew 3.3% year over year in the most recent period, the report found. Colorado’s GDP also rose 2.8% from the first quarter of 2024.

“After looking at the Q1 numbers, we were a little concerned about the slow growth environment for 2024, so it was good to see this accelerated growth in Q2. We have accelerated growth in consumption, investment and spending,” said Brian Lewandowski, executive director of CU’s Leeds Business Research Division.

“Our office does not currently believe the U.S. is in a recession, nor do we believe one is imminent,” he said.

Still, Lewandowski said, “we recognize that there are some warning signs out there: High interest rates continue to be a burden. There are some unique supply chain issues that continue to emerge around the world. We see inflation improving, but it hasn’t been addressed, it hasn’t been addressed. We see some consumer headwinds that certainly still exist, whether it’s a slow savings rate or rising debt.”

Additionally, “there seems to be more uncertainty and apprehension about things like the election and monetary policy,” said Richard Wobbekind, CU senior economist and faculty director of the Division of Business Research.

There were 43,029 new business entity registrations in the second quarter of 2024, according to Secretary of State Jena Griswold’s office. That’s a 21.7% drop from the previous year and a 4.7% drop from the previous quarter, a trend Griswold attributes largely to the expiration of a state program that discounted registration fees.

State lawmakers this year refused to fund the Colorado Business Fee Relief Act, which allowed businesses to form new limited liability companies and trademarks for $1.

“I would really call it a normalization of activity,” Lewandowski said of the decline in new entity registrations since the discounted fee program was discontinued.

Colorado saw 177,493 business entity renewals in the second quarter of 2024, a 3.7% increase year over year. “Colorado businesses are staying active,” Griswold said.

Colorado business dissolution filings totaled 13,127 in the second quarter of this year, an 11.4% increase from the same period in 2023.

There were 117 corporate bankruptcy filings in the most recent quarter, a 19.4% increase from a year earlier.

“That’s a big percentage change, but it’s still a small number,” Lewandowski said. Colorado businesses are not facing “an alarming number of bankruptcy filings at this point.”

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Originally published: August 12, 2024 at 6:15 pm