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UTAH’S CURRENT ECONOMIC OVERVIEW April 2014 Mark Knold Supervising Economist

UTAH’S CURRENT ECONOMIC OVERVIEW April 2014 Mark Knold Supervising Economist Utah Department of Workforce Services. Recovery. Prosperity. Peak. Trough. Expansion. Contraction. Anatomy of a Business Cycle. Economy. Time. State by State Employment Decline. Peak to Trough Decline.

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UTAH’S CURRENT ECONOMIC OVERVIEW April 2014 Mark Knold Supervising Economist

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  1. UTAH’S CURRENT ECONOMIC OVERVIEW April 2014 Mark Knold Supervising Economist Utah Department of Workforce Services

  2. Recovery Prosperity Peak Trough Expansion Contraction Anatomy of a Business Cycle Economy Time

  3. State by State Employment Decline Peak to Trough Decline Source: U.S. Bureau of Labor Statistics.

  4. Utah Employment % Change* 1960 – 2013 Employment Change Average per year: 3.1% 60 70 90 80 00 10 Source: U.S. Bureau of Labor Statistics, QCEW. Through December 2013. * Based on O-T-Y Not Seasonally Adjusted.

  5. Recovery Prosperity Peak Trough Expansion Contraction Anatomy of a Business Cycle Economy Time

  6. State by State Employment Recovery From Recession Trough to Current Source: U.S. Bureau of Labor Statistics; February 2014 Current Employment Statistics estimates.

  7. Recovery Prosperity Peak Trough Expansion Contraction Anatomy of a Business Cycle Economy Time

  8. State by State Recession Employment Rebound From Pre-Recession Peak Employment to Current Employment Source: U.S. Bureau of Labor Statistics; February 2014 Current Employment Statistics estimates.

  9. Utah Employment 2000 – 2013 Thousands Source: U.S. Bureau of Labor Statistics; March 2014

  10. Utah 16+ Population Estimate Thousands Source: U.S. Bureau of Labor Statistics; January 2013, CPS Population Estimates

  11. Utah Employment 2000 – 2013 Labor Force Growth Employment 66,000 Source: U.S. Bureau of Labor Statistics; March 2014

  12. Unemployment U.S. and Utah

  13. Utah Avg. Wage Growth and Unemployment Rate 1991 - 2013 Inverse Relationship Source: Utah Department of Workforce Services

  14. Utah Labor Force Percent Participation 1990 – 2014 Percent Source: U.S. Bureau of Labor Statistics; Local Area Unemployment Statistics

  15. Utah LFP and UnRate 2008 – 2014 Un Rate % LFP Unemployment rate drops while LFP declines; Implies “discouragement” or missing opportunities Source: U.S. Bureau of Labor Statistics; Local Area Unemployment Statistics

  16. Labor Force Participation That Left* 2008 – 2014 Source: U.S. Bureau of Labor Statistics; Local Area Unemployment Statistics * Diff between pre-recession level and recession

  17. Labor Force Participation That Left 2008 – 2014 Unemployment rate drops while “discouragement” or missing opportunities increase Source: U.S. Bureau of Labor Statistics; Local Area Unemployment Statistics

  18. Utah Employment-to-Population Ratio 1990 – 2014 Percent Source: U.S. Bureau of Labor Statistics; Local Area Unemployment Statistics

  19. Utah Employment-to-Population Ratio 2008 – 2014 % E-Pop Un Rate Unemployment rate decline not driven by employment gains Source: U.S. Bureau of Labor Statistics; Local Area Unemployment Statistics

  20. Unemployment U.S. and Utah

  21. Unemployment Rate 2004 - 2014 Note: Pre-recession variables is holding the labor force participation rate at pre-recession levels.

  22. Labor Force 2004 – 2014 66,000 92,000 Source: U.S. Bureau of Labor Statistics; Local Area Unemployment Statistics

  23. Change in Labor Force Participation Rate 2007 – 2011 2007 - 2013 Source: U.S. Bureau of Labor Statistics

  24. Change in Labor Force Participation 2007 – 2011(blue) 2007 – 2013(gray) Source: U.S. Bureau of Labor Statistics

  25. Utah Nonfarm Industry Profile (Numeric Change) 2007 - 2013 Employment loss from pre-recession peak to recession low Employment gain from recession low to September 2013 Natural Resources Construction Manufacturing Trade, Trans., Utilities Information Financial Activities Prof., and Business Education and Health Leisure and Hospitality Other Services Government Source: U.S. Bureau of Labor Statistics, QCEW

  26. Private Sector Employment in High Wage and Low Wage Industries 2000 - 2013 Employment Source: Utah Dept. of Workforce Services; March 2014 The average wage for all industries is the dividing line between high-wage and low-wage.

  27. Private Sector Employment % Chg. in High Wage and Low Wage Industries 2000 - 2012 Employment Change Source: Utah Dept of Workforce Services; March 2014 The average wage for all industries is the dividing line between high-wage and low-wage.

  28. Part-Time Employment in Utah 1997 - 2012 Source: U.S. Bureau of Labor Statistics

  29. Would Rather Have Full-Time Employment in Utah* 1997 - 2012 Source: U.S. Bureau of Labor Statistics *% of part-time who would rather work full-time.

  30. Women Have A Higher Propensity for Part-Time Employment 1997 - 2012 Utah Data Source: U.S. Bureau of Labor Statistics

  31. Would Rather Have Full-Time Employment in Utah* 1997 - 2012 Source: U.S. Bureau of Labor Statistics *% of part-time who would rather work full-time.

  32. Metro Areas Rebounding Faster Than the Non-Metro Areas 2004 - 2013 Source: Utah Department of Workforce Services

  33. Strong Rebound in the Provo Area 2004 - 2013 Source: Utah Department of Workforce Services

  34. Utah Employment by Establishment Employment Size 2000 – 2012 Avg. Source: U.S. Census Bureau, Local Employment Dynamics

  35. Various Comments of United States Economic Forecast U.S. Economic fundamentals continue to improve. U.S GDP growth of 2.5% - 2.7%. Unemployment lowering to around 6.5%. Employment growth of around 1.7%. Job gains frequently over 200,000 a month. Mortgage rates climbing toward 5.5%. Federal government fights less economically disruptive. FED stimulus of the economy easing (tapering), but not difficult to crank it back up.

  36. Utah Commercial Real Estate experts are looking for a strong 2014 Sold $1.4 B in industrial investment in 2013. Expect to repeat in 2014. Office absorption up, vacancies down, rents up, new construction. Retail added 1M sq. ft. in 2013; looking for continued levels of activity. Distribution looking for 1.9M new sq. ft. in 2014

  37. Utah Expectation for 2014 Job growth from 3.5% to 3.8%. I expect 4.0% to 4.2% in 2015. I am an optimist. Base this on improved U.S. performance for 2014 and 2015. Unemployment will be low, but still masking the underutilization of Utah labor. Therefore, wage growth could still be below average. Normally in-migration would be a contributing factor, but could still be weak.

  38. Utah Employment 2003 – 2014f Monthly Employment (000) Where employment would need to be to keep up with labor force growth (assumes no in-migration). Two-Year Forecast Forecast 8.0% Employment Growth Over Next Two Years Source: Utah Department of Workforce Services; April 2014 f = forecast

  39. Utah Employment Growth by Establishment Employment Size 2010 – 2012 Avg. Source: U.S. Census Bureau, Local Employment Dynamics

  40. Utah Employment by Establishment Age 2000 – 2012 Avg. Source: U.S. Census Bureau, Local Employment Dynamics

  41. Utah Employment Growth by Establishment Age 2010 – 2012 Avg. Source: U.S. Census Bureau, Local Employment Dynamics

  42. County by County Recession Employment Rebound From Pre-Recession Peak Employment to Current Employment Source: U.S. Bureau of Labor Statistics, QCEW employment

  43. Utah County-Level Hachman Indices 2012 0.4 0.6 1.0 0.8 0.2 Diminishing Diversity Source: Utah Dept. of Workforce Services

  44. 2003 – 2012 County Employment Growth and Hachman Indices

  45. County by County Recession Employment Rebound Low High High From Pre-Recession Peak Employment to Current Employment Low Low High Low High High High High High High High High Source: U.S. Bureau of Labor Statistics, QCEW employment

  46. Stretching the economy to accommodate new workers Stretching the economy to accommodate new workers Worker Vacuum Worker Vacuum U.S. Population by Age and Sex: 2010 Utah’s Population by Age and Sex: 2010 Male Female Male Female Millions Dominating the Labor Force Source: U.S. Bureau of the Census

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