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Idaho Economic Indicators
Oct. 20, 2009
After being among the national leaders in job growth during 2007, nonfarm jobs declined in 2008 for the first time since 1986, dropping 1 percent, and the loss accelerated in 2009. What was fractional in spring 2008 hit 7.5 percent between August 2009 and August 2008, the largest year-over-year job deficit since World War II. It slipped back to 7 percent between September 2008 and September 2009. Idaho’s unemployment rate edged downward a tenth of a point from August to 8.8 percent in September. That was the third straight month the rate has been essentially the same although it remains at its highest in 26 years. Source: U.S. Bureau of Labor Statistics
The total value of all the goods and services produced in Idaho increased modestly in 2008 to $52.7 billion, a 1.2 percent increase from 2007’s revised total of $52.2 billion. The depth of the recession offset productivity gains in the first half of 2008, holding the annual increase to its lowest level since 1986. The 2008 growth rate was 47th nationally. Adjusted for inflation, Idaho posted no growth in real gross state product between 2007 and 2008 percent. Between 2002 following the last recession and 2007, Idaho’s gross state product rose 44 percent, eight points higher than the national rate and the 13th highest rate in the nation. Increased productivity in health care, professional and business services, information, mining, utilities and government during 2008 were offset by the dramatic decline in construction and negative performances in natural resources, trade, financial services and transportation. Manufacturing rose only fractionally. Source: U.S. Bureau of Economic Analysis
The Otter administration further reduced its estimate of general tax revenue for FY2010 by 6.8 percent following a 4.1 percent reduction in March. Overall, the administration estimates the recession has slashed state tax receipts by $282 million. Total revenues are projected at just under $2.4 billion, more than $500 million below peak collections in FY2008. Persisting weakness in income and sales tax receipts since mid-2008 reflects the intensifying toll the national recession has been taking on the Idaho economy. Source: Idaho Division of Financial Management
In 2008, 24,296 new businesses filed with the Secretary of State, down over 15 percent from 2008 and the second straight annual decline. The previous decline was in 2001 during that national recession. Source: Idaho Secretary of State
Job Growth
Job losses in the Idaho economy escalated to over 49,000 between August 2008 and August 2009 before retreating below 46,000 in September. Total jobs increased 1,900 from August to September, returning to the seasonal pattern after 2008’s rare departure. The decline in nonfarm jobs from July to August was the only time that has occurred outside the 1980s since the Great Depression. September nonfarm jobs totaled 611,600. That was down 7 percent from a year earlier and below 2007, 2006 and 2005. For all of 2008, jobs were off 1 percent, the first annual decline in payrolls since 1986. Nationally, nonfarm jobs fell 4.2 percent in September compared to a year earlier. Construction, which has been hemorrhaging jobs since mid-2006 as the housing bubble burst, and manufacturing, primarily in the high technology sector, accounted for 42 percent of Idaho’s losses. Trade, transportation, professional and businesses services and hotels and restaurants accounted for the bulk of the rest. Even government employment was down from a year earlier, reflecting the severe reduction in tax revenues. Only health care and private education were in the black.
High-tech employment, which averaged 56,700 in 2007 and appeared to be gaining, declined again in 2008 and early 2009 following major layoffs at Micron Technology in the second half of 2007, in 2008 and early 2009 along with others in the industry including MPC and Hewlett-Packard. High-tech manufacturing jobs were down 4,000 in June from June 2008. The sector hit bottom in 2003 at 52,127 after peaking two years earlier at 58,159. Employment in 2008 averaged 55,559
Source: Idaho Department of Labor
Only 686,700 people were working in Idaho in September 2009 – 30,000 fewer than a year earlier and the seventh straight month under 700,000. It was the lowest employment level since February 2005 and the 20th month in a row that employment has been below year-ago levels. Total unemployment was over 66,000 as the jobless slipped a notch to 8.8 percent, primarily because fewer people were looking for work. Idaho’s 4.2 percent employment decline over the previous 12 months matched decline nationally as the jobless rate across the country spiked to 9.8 percent.
Source: Idaho Department of Labor
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The rapid escalation of Idaho’s unemployment rate has hit every county. Thirteen had double digit rates in September 2009, and every county had a rate higher than a year earlier.
Rising unemployment has driven jobless benefit claims and payments to unprecedented levels. The regular benefit payouts in 2008 totaled $210 million compared to $123 million in 2007. Another $22 million was paid in federal extended benefits last year. It was the highest annual benefit total ever only to be eclipsed less than halfway through 2009. Regular benefit payouts running over $11 million a week in February and March 2009 and weekly benefits payments exceeding 150 percent of the 2008 level pushed total payments through mid-October to $341.5 million augmented by another $172.3 million in federally financed benefits. Source: Idaho Department of Labor
Benefit payments were double the revenues paid into the trust fund in 2008, triggering a 70 percent increase in all unemployment insurance tax rates. While significant, even with the increase the average effective rate for 2009 was below the 2006 level because of the rate decreases in both 2007 and 2008 that brought the tax to its lowest point on record. But the higher rates in 2009 are covering about a third of the regular benefit payments, prompting the state to begin borrowing from the federal government to continue paying benefits in June. Another major tax rate hike will occur in 2010 and will exceed the 2009 increase although the amount will not be known until November. Twenty-one other states have gone broke and borrowed from the federal government, and more are teetering on the edge.
Personal Income
Total personal income in Idaho edged up in the second quarter of 2009, breaking a string of three quarterly declines. Social security and other non-unemployment benefit transfer payments offset continued declines in wages, business profits and investment earnings, and record unemployment benefit payments were responsible for putting total personal income in the black for the quarter. On an annualized basis, personal income totaled $48.9 billion for the April-June period. The government revised income figures for 2006 through 2008, pushing personal income in 2008 up 2.9 percent across the $50 billion mark for the first time. While that growth rate was the smallest annual growth rate since the years following the 2001 recession, it ranked 11th among the states.
Personal income in rural Idaho grew by 8 percent from 2006 to 2007, marking the first time since the 2001 national recession that personal income growth in rural Idaho outpaced growth in the five metropolitan areas. Personal income in the metro areas grew by 6.7 percent, more than two and a half points below the growth rate from 2005 to 2006. The growth rate in the Boise-Nampa metro area fell the sharpest, dropping from 10.2 percent in 2006 to 6.3 percent in 2007. Coeur d’Alene fell from 9.4 percent to 8 percent, and Idaho Falls dropped from 8.4 percent to 8 percent. Lewiston and Pocatello, which have benefited the least from the economic expansion following the 2001 national recession, recorded slightly higher growth rates in 2007 than in 2006.
Source: U.S. Bureau of Economic Analysis
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Per-Capita Personal Income
Idaho’s per-capita personal income increased 1 percent, or $329, to $32,133 in 2008. Nationally, per capita personal income increased 2.9 percent, or $1,136, to $39,751.
In the urban centers, only Lewiston and Pocatello recorded personal per capita income growth in 2007 above the national rate while the other three fell short of the national rate. The Boise-Nampa metro area, in fact, slipped to just 2.7 percent growth in 2007 from 5.8 percent the year before. Source: U.S. Bureau of Economic Analysis
After hitting a record of nearly $5 billion in 2008, foreign sales of Idaho goods and services plunged 38 percent during the first three months of 2009 as the bottom fell out of the computer chip market. They rebounded only slightly in the second quarter as chip prices strengthened somewhat. For the first half of 2009 the sale of high technology products was off 42 percent. First half exports totaled just under $1.7 billion. As many as 1,000 Idaho companies have sold goods and services in foreign markets – the vast majority small and medium-sized businesses. Before the recession, one of every seven manufacturing jobs in the state was linked to export sales.
Source: Global Trade Information Services of the U.S. Census Bureau
The recession took a bite out of Idaho’s tourism industry, driving tourism tax receipts down nearly 22 percent during the first nine months of 2009 compared to the same months in 2008. Higher travel costs and increasing economic uncertainty did not keep hotel, motel and private campground receipts from hitting a new record of $407.6 million in 2008, up from $388.9 million in 2007. But January-September 2009 receipts were off $68 million from the first nine months of 2008. Tourism has been estimated to account for about 5 percent of Idaho’s gross state product. Sources: Idaho Travel Council; Global Insights’ Economic Impact of Tourism on Idaho’s Economy
Construction
After posting the first year-over-year increase in June, construction values across Idaho plunged again in July and August. Just over $1 billion in permits were issued during the first eight months of the year, 43.5 percent below the 2008 value at that point and well below the record pace of 2005. Residential values held their own against August 2008 at $76 million, but nonresidential construction, which was responsible for the year-over-year increase in June, came in at just half the $72 million posted in August 2008. Annual construction values have been dropping since they hit $4 billion in 2005. Since mid-2006, Idaho has lost 20,000 construction jobs. Source: Wells Fargo Idaho Construction Report
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