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

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

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

4. Utah Employment % Change* 1960 – 2013 Source: U.S. Bureau of Labor Statistics, QCEW. Through December 2013. * Based on O-T-Y Not Seasonally Adjusted. 60 70 80 90 0010 Average per year: 3.1% Employment Change

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

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

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

8. 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

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

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

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

12. Unemployment U.S. and Utah

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

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 % 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

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 Source: U.S. Bureau of Labor Statistics; Local Area Unemployment Statistics Unemployment rate drops while “discouragement” or missing opportunities increase

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 Source: U.S. Bureau of Labor Statistics; Local Area Unemployment Statistics Un Rate Unemployment rate decline not driven by employment gains

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

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

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

25. Natural Resources Construction Manufacturing Trade, Trans., Utilities Information Financial Activities Education and Health Government Utah Nonfarm Industry Profile (Numeric Change) 2007 - 2013 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

26. 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 2000 - 2013 Employment

27. 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 2000 - 2012 Employment Change

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

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

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

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

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. 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

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

43. Utah County-Level Hachman Indices 2012 Source: Utah Dept. of Workforce Services Diminishing Diversity 0.2 0.40.61.0 0.8

44. 2003 – 2012 County Employment Growth and Hachman Indices

45. 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

46. 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