State economists are trimming their forecasts for economic growth and tax revenues after business spending and exports declined more than expected this summer.

But they aren’t calling for a downturn yet, given the continued strength in hiring and consumer spending.

“We are not forecasting a recession, but recession risks remain elevated,” Meredith Moon, an economist with the Colorado Legislative Council, (CLC) told members of the legislature’s Joint Budget Committee on Friday.

Trade tensions and slower growth abroad are weighing on economic activity in the U.S. and Colorado. Higher tariffs and a stronger U.S. dollar have contributed to a 6.4 percent drop in Colorado exports this year through July, Moon said in a quarterly briefing.

Some Colorado producers are getting hit much harder — wheat exports are down 56 percent year-to-date, corn exports are down 44.5 percent, and animal hide exports are off 38.4 percent.

Nor are consumers abroad drinking more Colorado alcohol to ease their worries. Beer exports from the state are down 37.4 percent and whiskey exports are off nearly 80 percent.

But compared to other states, Colorado’s economy is among the least dependent on exports, putting it in a better spot to weather a trade war.

“We have fairly limited exposure to foreign markets,” said Kate Watkins, chief economist with the CLC.

And the employment situation report from the Colorado Department of Labor shows continued hiring, with a robust 9,000 nonfarm jobs added in August versus July.

Hiring between June and August was revised higher from an initial estimate of 7,200 to 10,000, something that doesn’t line up with a contraction.

The state’s unemployment rate fell to 2.8 percent in August from 2.9 percent in July and 3.4 percent a year ago. Over the past year, Colorado has had one of the biggest percentage-point drops in its unemployment rate of any state.

A tight labor market is resulting in stronger wage gains and leaving consumers more confident about spending.

“The current economy is being driven by consumer spending,” said Luke Teater, deputy director at the Office of State Planning and Budgeting. “Consumer spending has been strong. We expect that to continue.”

And although home price gains are slowing, homeowners in Colorado continue to see some of the strongest home equity gains in the country, according to CoreLogic.

Only 1.75 percent of Colorado homeowners were behind on their mortgage in the second quarter, the best showing in the country, according to Black Knight, a real estate information provider.

But there are several risks. If business activity contracts, it is only a matter of time before hiring follows. A national manufacturing index showed its first decline since 2015 and short-term interest rates are higher than long-term rates, one of the most reliable indicators of a coming recession.

Home price appreciation is slowing in metro Denver, developers are adding fewer apartments and auto dealers are struggling to move as many cars and trucks as they did last year.

State forecasters don’t expect the brief spike in petroleum prices because of a bombing of Saudi oil facilities last weekend to be sustained. If demand globally continues to weaken, producers in the state, already struggling, will be hurt.

Last week, the city of Denver reported that sales tax collections rose at a 4 percent pace in the first half of the year compared to a 7 percent pace last year, linked to slower construction spending and fewer automobile purchases.

Slower economic activity has caused economists at both the CLC and OSPB to scale back their projections for state tax collections, although the two groups disagree on the amount.

The more optimistic OSPB forecast is expecting general fund revenues, after increasing 7.3 percent last fiscal year, to grow a tamer 4.1 percent this fiscal year.

The state is expected to collect $44.1 million less in its general fund this year than what was forecast in June, and $109.5 million less next year.

“The most likely scenario is a slowdown, not a contraction,” said Lauren Larson, budget director at the OSPB.

The CLC is projecting a $76.3 million drop in general fund collections this fiscal year versus what it estimated in June, and a $120.9 million haircut next year.

Surprisingly, the revenues collected last fiscal year, ended June 30, are coming in $76.1 million below the June forecast, according to the CLC.

In the state’s favor, the surplus due back to taxpayers under the Taxpayer Bill of Rights or TABOR will provide a cushion of sorts. If revenues continue to come in lower than expected, those refunds will disappear before spending gets cut.

Watkins said that much of the slow down appears to be centered in the areas that have enjoyed the strongest growth this decade, while other areas that struggled are still seeing an acceleration.

“We are seeing quite a bit of slowing in the Front Range, especially Denver,” she said. “There’s been a pick up in activity in other parts of the state.”