Colorado Economic Outlook: January 2010

Colorado Recovery May Lag, but Future Looks Bright Colorado fell into recession later than the nation, as the housing market slump occurred later and was less severe. In addition, the state’s energy industry helped keep the economy afloat as energy prices soared during the first half of 2008. As a result, the labor market fared far better than the nation until the housing market finally succumbed … Colorado Recovery May Lag, but Future Looks Bright Colorado fell into recession later than the nation, as the housing market slump occurred later and was less severe. In addition, the state’s energy industry helped keep the economy afloat as energy prices soared during the first half of 2008. As a result, the labor market fared far better than the nation until the housing market finally succumbed to national pressures and commodity prices plunged. Despite the recent rebound in commodity prices, the energy industry is struggling as prices for natural gas, the largest component of Colorado’s energy industry, remain far below 2008 peak levels. The good news is that another major driver for the state’s economy, high tech, is experiencing a rebound as semiconductor bookings and shipments have risen sharply. The high-tech industry, along with professional business services and education & healthcare services, will lead Colorado out of the recession. Due to the recession’s late arrival, Colorado’s recovery may lag the nation’s. However, a healthier housing market and better all around credit quality suggests the duration of the downturn in Colorado will likely not be as long as that for the nation. Thank you for your interest in Wells Fargo’s Economic Commentary by Email. You are receiving this message because you have requested Economic Commentary information and updates sent via email. If you no longer wish to receive these emails, please click on the following link to access the Economic Commentary by Email registration page: http://www.wachovia.com/economicsemail.

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