Colorado will join the rest of the nation in a recession next year, bowing to economic pressures and recording a jobless rate that approaches the highest level in two decades, a new report predicts.

The state's unemployment rate will increase to 6.4 percent in 2009 from 5.0 percent in 2008, according to the annual economic forecast by the University of Colorado's Leeds School of Business.

"Low consumer confidence, coupled with the credit and housing crises, as well as stock market instability, point to a gloomy economic picture for Colorado," said Rich Wobbekind, the CU economist who led the analysis.

After a modest gain this year, Colorado will lose 4,300 jobs in 2009, a drop of 0.2 percent, as the construction, financial and information sectors continue to bleed, according to the forecast.

Economists who participated in a panel discussion Monday to discuss the research said they believe Colorado may well experience an even tougher year than they forecast.

"Things keep getting worse every month on the national level," Tim Sheesley, an Xcel Energy economist, told a packed ballroom at the Grand Hyatt Hotel in downtown Denver. "I think we could be closer to a 1 percent decline" in the number of jobs across Colorado.

Colorado has held up better than most of the country, adding jobs this year - albeit at a slower pace - while most states have seen declines.

But Colorado's economy has gradually downshifted, state government has resorted to a hiring and construction freeze, and layoffs have mounted. ProLogis, MDC Holdings, Janus Capital, Western Union and Sun Microsystems are among the companies that have announced job cuts.

At the same time, more businesses, from builder Village Homes to the owner of the Vail Plaza Hotel & Club, have sought bankruptcy protection.

If a credit crisis persists and companies cannot get needed financing, Colorado could sustain some "major business failures" that could push the state into a deeper hole, the economists said.

Still, most regional economists expect Colorado to continue performing better than the nation as a whole, partly because the state's real estate sector is not getting as hammered as other markets.

Colorado's rate of unemployment should remain below the 7.5 percent to 8 percent range the nation could witness in 2009, the research noted.

The energy sector, as well as education and health services, also will keep expanding in 2009, the report predicts, giving economists confidence that Colorado is in at least a relatively good spot.

"Despite the projected decline in employment, the fundamentals of the state economy will remain the same," the authors wrote.