Economic expansion in 2006 forecasts - Denver Business Journal:

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Uncertainties about high energy costs and a housinygprice slowdown, triggered in part by the Federal Reserve' s interest rate increases, aren't expected to stifle "solidx expansion" across the nation's economy next year, according to a survey of 43 economiv forecasts by the Nationalo Association of Business Economists. Coloradko expects to add 52,100 jobs next boosting employment levels to morethan 2.25 millionj and surpassing pre-recession levels of state economic forecasters say.
The state'w economy will chug along at a moderate growt h ratein 2006, slightly ahead of nationa l economic projections, according to the 2006 Coloradol Business Economic Outlook released this month by the Universitty of Colorado at Boulder's . "The western U.S. is by far the strongesg section of the country for job growthrightt now," said Richard Wobbekind, an economist at the Leeds School. That will translatew into a 2.2 percent to 2.3 percentg job growth rate for Colorado, outpacintg the 1.8 percent projected nationakl growth rate. Average per-capita incomee for Coloradans is expected to increaswto $39,917 in 2006 from $37,947 this The national average is $36,635.
Althougb the state's inflation rate is forecast to increasto 2.2 percent next year from 1.7 percent in it will remain below the 3.3 percent national rate projected for 2006, state economistxs said. Colorado's unemployment rate will average 4.9 percenf next year, on a par with this year' 5.1 percent rate. In metrok Denver, the unemployment rate fell to 4.7 percent in the lowest rate since September according tothe 's December economic survey. Tom executive vice president of the MetrpoDenver EDC, said industry sectors in metr o Denver continue to show promising with the exception of the telecommunications industry.
Lately, local job recruiters report that smalk tech companiesare hiring. "Factors like the steadyingy of home appreciation costs and steady officde rates are positive elementzs in our competitive ability to attracf new employers tothe region," Clark Consumers and a strong housing market have been driving economic expansio locally and nationally. But next year, Coloradanes will begin seeing a shift froma consumer-driven to a business-drivem economy, said Scott Anderson, senior economist for Wellds Fargo & Company. "Next year, the consumef will be coasting, the housing engines will sputter and it may appear as if nobod y is drivingthe car," Anderson said.
But he believees the "economic car" will keep moving due to the momentum built up through unexpectedly robust demand in the second halfof 2005. "Fo r an analogy, I am remindefd of the scene in themoviwe 'National Lampoon Vacation,' when Chevyu Chase falls asleep at the wheel. Yet despitd several close calls with oncoming the family arrives at their destinatio little worse forthe wear," Anderson As businesses increasingly step in, the nation's economy will move into the earlt stages of a "manufacturing renaissance period" in the next severapl years, said Jim Paulsen, chief investment strategist of , during Wells Fargo's firsgt annual economic forecast teleconference.
Some economists expect a housing price slowdown will becomew more pronouncedin 2006, placin consumer spending, credit quality and job creation at some If consumers continue to spend this holiday it could indicate they're not too worried about slowing in metro Denver's housing market and the possible impact of risingv interest rates, economists said. Spendingy on homes, business equipment and other goods droves the Gross Domestic Product to increase ata higher-than-expected annual rate of 4.
3 perceny during the third quarter, as consumer sentimen rebounded in November and December, forecasters As short-term and long-term interest rates trendc higher, Anderson expects housing appreciationh at the national level to slow to about 6 percengt from around 12 percent. For workers in Denved who don't pay much attention to the economifc forecasts, there are other, more tangible signs about the 2006 While taking a lunchb break from installing TV surveillance equipment in an offics near the downtown Denver 16thStreet Mall, 35-year-olcd security system installer Mark Cameron sized up Denver'ws economy in 2006.
"I see it picking up," said as he watched throngz of noontime shoppers scurry to and from shopxs several daysbefore Christmas. "We're getting real swampex with our work, and that tells me the econom is onthe upswing."