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

Economy Anatomy of a Business Cycle Time Peak Trough Contraction Expansion RecoveryProsperity

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

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

Economy Anatomy of a Business Cycle Time Peak Trough Contraction Expansion RecoveryProsperity

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

Economy Anatomy of a Business Cycle Time Peak Trough Contraction Expansion RecoveryProsperity

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

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

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

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

Unemployment U.S. and Utah

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

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

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

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

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

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

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

Unemployment U.S. and Utah

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

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

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

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

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

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

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

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

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

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

Metro Areas Rebounding Faster Than the Non-Metro Areas Source: Utah Department of Workforce Services

Strong Rebound in the Provo Area Source: Utah Department of Workforce Services

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

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.

Utah Commercial Real Estate experts are looking for a strong 2014 Sold $1.4 B in industrial investment in Expect to repeat in 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

Utah Expectation for 2014 Job growth from 3.5% to 3.8%. I expect 4.0% to 4.2% in I am an optimist. Base this on improved U.S. performance for 2014 and 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.

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

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

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

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

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

Utah County-Level Hachman Indices 2012 Source: Utah Dept. of Workforce Services Diminishing Diversity

2003 – 2012 County Employment Growth and Hachman Indices

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

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