Thursday, June 16, 2016

Homicide rate in Colorado near 50-year low

There's been a lot of talk on homicide in the United States recently, so I thought I'd add in a little factual information about the picture in Colorado.

As I've noted on several topics before, it rarely makes sense to speak of a nationwide statistic when discussing the United States. That may make sense for Finland where nearly the entire population of five million lives within one or two metro areas, but it makes no sense for a country as large and diverse as the United States.

Colorado is the size of several smaller European countries (including Norway and Finland) and it makes more sense to look at the US as a collection of political entities, rather than one. After all, no one lives "in the United States." People don't even live "in Colorado." People tend to live, work, and play within a single metropolitan area, most of the time.

In a future article, I may take a look at homicide rates separated out by metro areas in Colorado. But, for now, let's look at the state overall.

The graph shows the homicide rate in Colorado since 1960, as reported by the FBI:

In 2014, the homicide rate was 2.8 per 100,000. That's up from the 50-year low reached in 2010 (when the rate was 2.5). In fact, the homicide rate in 2010 was the lowest recorded in more than 50 years. The FBI data here does not go back before 1960, but based on national data before 1960, its a good bet that homicide rates in Colorado during the 50s — which was a period of very low homicide rates nationwide — were even lower than today in Colorado.

Since the 1972 peak in Colorado, when the homicide rate was 8.1 per 100,000, the homicide rate has fallen 65 percent. Since 1981, when the rate again went up to an unusually high level of 8.0 per 100,000, the rate has fallen by 64 percent.

Most of the public, however, is unaware that homicide rates have been declining in Colorado and nationwide over the past 20 years. The Pew Research Center has noted this in terms of national statistics.  The Colorado trend is a little different from the national trend, and you will notice the national homicide rate tends to be higher than the Colorado rate:


This data shows trends over time. But how does Colorado compare to other states right now?

In this map, we can see that Colorado is generally a low-homicide state, and similar to numerous other states in the northern US and provinces in central Canada:


Here's another graph that shows where Colorado falls:

The red bars are Canadian provinces, and the blue bars are US states. This is all based on the most recent data from the FBI and the Canadian government.

If you're interested in comparisons to Mexican state-by-state data, I completed an earlier analysis on that here.

(The rates were calculated using homicide totals from FBI sources, which I then adjusted to Colorado resident population for each year.)

National Job Growth Stalls, Fed Keeps Interest Rates Low

There is no doubt that there is a boom going on out there. Unfortunately, for much of the country, it's largely just a boom in asset prices, and not in job growth. That means real incomes are going down for people who don't make a sizable amount of income off assets they own.

In other words, for most people, the cost of living is going up while the job situation is stagnating. Colorado has tended to do better than many areas of the country in recent years, and the national data tends to reflect a more negative reality.

Yesterday, the Fed admitted as much when the FOMC voted to take no action on the target federal funds rate announcing "Against this backdrop [of poor economic data], the Committee decided to maintain the target range for the federal funds rate at 1/4 to 1/2 percent." (See the official statement, here.)

The move signals a surrender on the Fed's part in regards to earlier claims that it would gradually raise interest rates throughout 2016 back to more "normal rates" which haven't been seen since 2009.
With an economic situation that doesn't look to improve significantly this year, the Fed doesn't have much on which to justify any rate hikes (from the Fed's perspective). So, for the foreseeable future, we're likely to see an ongoing interest rate trend that looks like this:



But who can be surprised? When the new jobs data came out for May, earlier this month, even the usual media sources were forced to admit job growth was a disappointment. The administration has been crowing about how the unemployment rate has gone down, but unemployment rates can go down without any real job growth, and the Fed summed it up with yesterday's announcement when it said: "Although the unemployment rate has declined, job gains have diminished."

In fact, as I point out here, job growth was at a 28-month low in May 2015, and the April-May job gains were the worst we've seen since 2009, in the midst of the recession.



This comes after months of being told how excellent the job situation is by both the administration at the media. However, the job growth in the current recovery is the worst we've seen in numerous cycles. Moreover, much of the usually-cited jobs data does not take into account the many workers who are involuntarily employed part time, due to employer cutbacks in hours and declines in the need for workers as the economy slows:


The Fed has become especially concerned about job growth in recent months, but while we were being told how swell everything was the part six years or so, it's apparent that the Fed never thought so. Had the economic data actually been good beyond the often-reported headline numbers, then the Fed would have actually raised the target rate. As it is, the Fed was always too afraid to raise rates, since it has recognized all along that the current recovery has been lackluster at best.

The economy we have, though, means ongoing attempts at monetary and fiscal stimulus, and a continuation of ultra-low interest rate policy, currently in its seventh year.

For reference, here's a look back at the terget fed funds rate going back to 1992: