Economics

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Economic Outlook

OSPB considers the primary risks to Colorado’s economy to be federal trade policy, which increases costs to consumers and businesses alike, and the sustainability of strength in the labor market, which supports wage and salary growth and consumer spending. As tariff-induced inflation and economic uncertainty strain middle- and lower-income households, the highest earners have seen stronger growth in income and wealth, and currently account for a majority of all consumer spending. As a result, the economy’s recent strength relies heavily on spending and investments from this group. Risks that threaten these spending patterns therefore also threaten the broader economy, such as a pullback in AI investments, a slowdown in broader economic activity related to tariff-induced reductions in consumer purchasing power and business investments, or labor market weakness.