With economic prophecy, fear can be a fearful thing

Count among the many concerns associated with what’s feared could be an economic downturn the self-fulfilling prophecy. That’s the phenomenon in which something comes true simply because people expect it will.

Could the threat of a recession lead to a recession? If companies and households significantly change spending to prepare for a downturn, there’s a possibility they could cause one.

Even as stock markets imitate roller coasters and trade tensions mount worldwide, what’s going on in Colorado and the Grand Valley? Here’s a review of some of the latest indicators, to offer a look at the situation:

The Leeds Business Confidence Index, a quarterly measure of optimism among business leaders across Colorado and industry sectors, declined heading into the third quarter. The index dropped 2.2 points from the second quarter and 9.1 points from the third quarter of 2018. But at 50.5, the overall reading still reflected more positive than negative responses to the survey upon which the index was based. Asked about the Colorado economy, 20.5 percent of business leaders said they expect moderate or strong increases, 57.1 percent said they anticipated no change and 22.5 percent predicted moderate or strong decreases. While the index signals Colorado business leaders are less upbeat, it also reflects uncertainty.

The pace of new businesses opening in Colorado has slowed, but new entity filings with the secretary of state’s office for the second quarter still portend job growth in the third and fourth quarters.

The seasonally unadjusted unemployment rate slipped a tenth of a point to 3.5 percent in Mesa County in July, the latest month for which estimates are available. The latest rate remains higher than the 3 percent posted in May, but lower than the 4.2 percent posted in July 2018. Moreover, Mesa County payrolls have increased 2,263 over the past year even as the number of people counted among those unsuccessfully looking for work has decreased 434.

Sales tax collections, a key indicator of retail activity, increased 2.7 percent in Mesa County in July. For the year, sales tax collections were up 4.7 percent. The City of Grand Junction hadn’t posted the July numbers on its website as of press deadline.

The pace of real estate sales has slowed in Mesa County so far this year compared to last year. But that could reflect the effects of a lower inventory of existing homes on the market, less selection and higher prices.

The big picture? Even as concerns persist about economic slowing, there’s still confidence. Moreover, the Grand Valley has become increasingly attractive as a place in which to do business and live.

Fluctuating stock markets and trade tariffs grab headlines and add to the unease business owners and consumers feel about the future. Uncertainty exacerbates the situation. What matters most, though, is what’s happens on a localized level on a day-to-day basis. For businesses, that’s sales and demand for products and services. For consumers, it’s a steady paycheck. For businesses and consumers alike, it’s the assurance they can continue to pay their bills.

If nothing else, it’s logical to expect a national economy that’s been going up for so long must at some point come down. But when? Here’s hoping the prophecy isn’t self-fulfilling. In that situation, Franklin Roosevelt was right: The only thing we have to fear is fear itself.