Zions Bank Economic Overview Meridian Chamber of Commerce May 2, 2017
National Economic Conditions
Dow 20,000 The Trump Bump Dow Reaches New Heights Following U.S. Presidential Election Source: Wall Street Journal
Current Level of Consumer Confidence Indicates Economic Prosperity 130 120 110 Above 110 indicates economic prosperity Apr CCI = 120.3 100 90 80 70 60 50 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Source: The Conference Board
Expectations of Future Inflation on the Rise
NFIB Small Business Optimism Index Source: Trading Economics
Irrational Exuberance?
Divergence of Soft vs Hard Data
Why?
Cumulative Job Loss by Months of Recession Thousands Source: Euler Hermes analysis of Bureau of Labor Statistics Data
Cumulative Job Loss by Months of Recession Thousands Source: Euler Hermes analysis of Bureau of Labor Statistics Data
Index Slower Recovery than Past Recessions 150 140 130 120 110 100 90 80 0 5 10 15 20 25 30 35 40 Periods from Value Scaled to 100 2007 Recession 2001 Recession 1990 Recession 1981 Recession 1980 Recession 1973 Recession Source: Federal Reserve Bank of St. Louis
Slower Recovery than Past Recessions
Mixed March Job Indicators Indicator Expectation Actual Total Nonfarm Payrolls 175,000 98,000 Unemployment Rate 4.7% 4.5% Private Payrolls 200,000 89,000 Monthly Average Hourly Wage Growth Yearly Average Hourly Wage Growth 0.3% 0.2% 2.8% 2.7% Labor Force Participation 62.9% 63.0% Sources: Wall street Journal and Bureau of Labor Statistics
98,000 Jobs Added in March 500 300 8.7 Million Jobs Lost Payroll Change 000 s 100-100 -300-500 -700 15.5 Million Jobs Recovered -900 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: Bureau of Labor Statistics
98,000 Jobs Added in March 350 300 250 237 225 297 291 249 216 219 Payroll Change 000 s 200 150 100 50 126 153 43 176 124 164 155 98 0 January-16 February-16 March-16 April-16 May-16 June-16 July-16 August-16 September-16 October-16 November-16 December-16 January-17 February-17 March-17 Source: Bureau of Labor Statistics
National Employment Change Percent Change in National Employment by Industry: Mar 2016 to Mar 2017 Ntl. Res. & Mining Construction Manufacturing Trade, Trans., Utilities Information Financial Activity Prof. & Bus. Serv. Ed. & Health Serv. Leisure & Hospitality Other Services Government -1.2% Total: 1.5% 0.4% 0.3% 0.7% 0.9% 0.7% 2.6% 2.2% 3.2% 2.3% 1.7% -2% -1% 0% 1% 2% 3% 4% Source: Bureau of Labor Statistics; seasonally adjusted
National Employment Change Total Change in Number of Jobs by Industry in Thousands: Mar 2016 to Mar 2017 Ntl. Res. & Mining Construction Manufacturing Trade, Trans., Utilities Information Financial Activity Prof. & Bus. Serv. Ed. & Health Serv. Leisure & Hospitality Other Services Government -32 3 37 54 177 192 178 152 258 527 639-100 0 100 200 300 400 500 600 700 Source: Bureau of Labor Statistics; seasonally adjusted
Unemployment Rate Indicates Full Employment 11.0 10.0 9.0 8.0 7.0 6.0 5.0 4.0 5.0% = Full Employment 3.0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: Bureau of Labor Statistics
18.0 16.0 Unemployed and Discouraged Workers Down from Last Month 14.0 12.0 7.1 10.0 8.0 6.0 4.4 4.0 2.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 U-6 (Underemployed) U-3 (Unemployment) Source: Bureau of Labor Statistics
% 68 66 Labor Force Participation Among Lowest Level in Almost 40 Years Mar 2000 67.3% 64 62 Apr 1978 63.0% 60 58 Mar 2017 63.0% 56 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 Source: U.S. Bureau of Labor Statistics Note: Seasonally adjusted
% 68.0 Labor Force Participation Increasing Slightly 67.0 66.0 65.0 64.0 63.0 63.0 62.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: U.S. Bureau of Labor Statistics Note: Seasonally adjusted
90% 80% 70% 60% 50% Civilian Labor Force Participation Rate Male vs Female 40% 30% Men Women 1948 1954 1960 1966 1972 1978 1984 1990 1996 2002 2008 2014 Source: Bureau of Labor Statistics
Participation Among Women Aged 25-34 Has Surged
4.0% 3.5% Yearly Wage Growth Down Slightly in March Mar. 2017 2.7% 3.0% 2.5% 2007-2016 Average = 2.4% 2.0% 1.5% 1.0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: U.S. Bureau of Labor Statistics Note: Growth rate calculated using real chained 1982-1984 dollars
Producer Price Index Rising Slightly in March 5.0 4.0 3.0 2.0 Percent 1.0 0.0-1.0-2.0 Year-to-Year Change 2011 2012 2013 2014 2015 2016 2017 Source: Bureau of Labor Statistics; not seasonally adjusted
4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% -0.5% Inflation Above Fed Target But Below Expectations in March U.S. Consumer Price Index Yearly Change Rate Sept 2011 Dec 2011 Mar 2012 Jun 2012 Sept 2012 Dec 2012 Mar 2013 Jun 2013 Sept 2013 Dec 2013 Mar 2014 Jun 2014 Sept 2014 Dec 2014 Mar 2015 Jun 2015 Sep 2015 Dec 2015 Mar 2016 June 2016 Sep 2016 Dec 2016 Mar 2017 Source: Bureau of Labor Statistics
Growth in Consumer Spending Under Par Personal Consumption Expenditure Yearly Percent Change 5 4 3 Percent 2 1 0-1 -2 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: Bureau of Economic Analysis
Consumers Drive Growth in GDP 6.00% 4.00% 2.00% 0.00% -2.00% -4.00% 2012 2013 2014 2015 2016 2017 Government Inventories Net Exports Fixed Investment Personal Consumption Real GDP Growth Q1 2017 GDP 0.7%
140 130 120 110 100 90 1973 = 100 The U.S. Dollar is Strong Trade Weighted U.S. Dollar Index: Broad 80 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: Federal Reserve
Euro compared to U.S. Dollar $1.60 $1.50 1.39 $1.40 $1.30 $1.20 $1.10 $1.00 $0.90 $0.80 PARITY 1.06 Source: Federal Reserve Bank of St. Louis
U.S. Dollar Compared to Chinese Yuan $6.00 $6.50 $7.00 $7.50 $8.00 $8.50 2008 China stops the yuan s rise 2001 China joins WTO 2005 China allows the yuan to rise 2010 China allows the yuan to rise Aug 2015 China devalues the yuan by largest amount in 20 years 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: Federal Reserve Bank of St. Louis
$1.80 $1.70 $1.60 $1.50 $1.40 $1.30 $1.20 $1.10 British Pound Dropped to New Low Following BrexitVote Brexit Vote $1.00 2010 2011 2012 2013 2014 2015 2016 2017 Source: Federal Reserve Bank of St. Louis
U.S. Total Rig Count Recovering from Low as Oil Prices Rise $120 $110 $100 $90 $80 $70 $60 $50 $40 $30 $20 2013 2014 Oil Prices 2015 Source: Baker Hughes and U.S. Energy Information Administration Note: Total count includes oil and gas rigs 2016 Active Oil Rigs 2017 2,200 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400
Federal Funds Target Rate Sees 3 nd Increase in Over a Decade 6.0 5.0 4.0 3.0 2.0 Federal Funds Target Rate = 1.0 1.0 0.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: U.S. Federal Reserve
March 2017 Fed Rate Increase Projections 4% 3% 3.0% 3.0% 2% 1.4% 2.1% 1% 0% 2017 2018 2019 Long Run Source: Board of Governors of the Federal Reserve
Idaho Economic Conditions Source: U.S Census Bureau
CA 0.7% OR 1.7% WA 1.8% NV 2.0% ID 1.8% AK 0.6% Idaho Population 3 rd Fastest Growing in U.S. UT 2.0% AZ 1.7% MT 1.0% WY -0.2% CO 1.7% NM 0.0% HI 0.2% Percent Change: 2015 to 2016 U.S. Rate = 0.7% ND 0.1% SD 0.9% NE 0.7% TX 1.6% KS 0.3% 0.0% OK 0.4% MN 0.7% IA 0.4% MO 0.3% AR 0.3% WI 0.2% LA 0.3% IL -0.3% MS 0.0% MI 0.1% IN 0.3% TN 0.9% AL 0.2% 1.5% or more OH 0.1% KY 0.3% 0.7% to 1.4% (at or above U.S. rate) 0.2% to 0.6% 0.0% to 0.1% Population Loss WV -0.5% VT -0.2% PA -0.1% NC 1.1% SC 1.4% GA 1.1% VA 0.5% FL 1.8% NH 0.4% NY 0.0% ME 0.2% DC 1.6% CT -0.2% DE 0.8% MD 0.4% MA 0.4% RI 0.1% NJ 0.1% Source: U.S. Census Bureau
Total Population 1,800,000 1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 Idaho Population and Components of Change 1,683,140 18,869 10,296 60,000 50,000 40,000 30,000 20,000 10,000 0-10,000 Components of Population Change 400,000 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 Net Migration Natural Increase Total Population -20,000 Source: Zions Bank analysis of U.S. Census Bureau data
Idaho Population Growth Rates By County 2015 to 2016 State Average = 1.8% Increase of 3.0% or Greater Increase of 1.8% to 2.9% Increase of 1.0% to 1.7% Increase of 0.0% to 0.9% Population Loss Boundary 3.1% Bonner 1.8% Kootenai 2.6% Benewah 0.6% Latah 1.2% Nez Perce Lewis 0.6% 1.6% Adams 1.6% Washington 2.1% Payette Gem 0.8% 1.6% Canyon 2.2% Ada 2.4% Owyhee 0.7% Shoshone 0.0% Clearwater 0.2% Boise 1.6% Idaho -0.6% Valley 4.1% Elmore 0.9% Camas 0.7% Gooding -0.1% Custer 0.2% Jerome 1.2% Twin Falls 1.7% Lemhi -0.4% Blaine 1.1% Lincoln -0.7% Cassia 0.0% Butte 0.0% Minidoka 1.1% Power 0.4% Clark -1.4% Jefferson 2.5% Bingham 0.5% Oneida 1.3% Bannock 0.6% Franklin 2.9% Fremont 1.0% MadisonTeton 2.5% 3.7% Bonneville 2.0% Caribou 1.8% Bear Lake 0.7% Source: U.S. Census Bureau
CA 2.1% OR 2.2% WA 2.9% Note: Seasonally Adjusted Source: Bureau of Labor Statistics Idaho Employment Growth 6th in the Nation Percent Change in Employment for States: March 2016 to March 2017 U.S. Rate = 1.5% NV 3.0% AK -2.1% ID 2.7% UT 3.2% AZ 2.0% MT 2.1% WY -2.1% HI 0.7% CO 1.9% NM 0.9% ND -0.3% SD 1.6% NE 0.9% KS 0.3% TX 2.1% OK -0.1% MN 1.5% IA 0.5% MO 1.4% AR 1.1% WI 0.9% LA -0.1% IL 0.4% MS 0.0% MI 1.9% IN 1.5% TN 2.2% AL 1.4% OH 0.7% KY 1.5% GA 3.0% WV -0.8% VT 0.9% PA 1.0% NC 1.6% SC 1.8% VA 1.2% FL 3.0% NY 1.2% 2.0% or more 1.6% to 1.9% (at or above the U.S. rate) 1.0% to 1.5% 0.0% to 0.9% Loss ME 0.9% DC 0.8% CT 0.1% DE 0.8% MD 1.6% MA 1.4% RI 0.8% NJ 1.2%
Idaho Total Employment at New Highs Thousands of Employees 800 700 600 500 Loss of 59,000 jobs from 2007-2010 Gain of 110,100 jobs since low in 2010 400 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Total Nonfarm Employment Source: U.S. Bureau of Labor Statistics, Total nonfarm seasonally adjusted Note: Numbers rounded to nearest thousand
Idaho Employment Gains and Losses by Industry Percent Change in Idaho Employment by Industry: March 2016 March 2017 Ntl. Res. & Mining Construction Manufacturing Trade, Trans., Utilities Information Financial Activity Prof. & Bus. Serv. Ed. & Health Serv. Leisure & Hospitality Other Services Government -3.0% Total: 2.6% 5.2% 1.9% 1.5% 4.5% 4.5% 2.7% 3.7% 1.7% 2.5% 2.6% -4% -2% 0% 2% 4% 6% Source: Idaho Department of Labor
Idaho Employment Gains and Losses by Industry Total Change in Idaho Employment by Industry: March 2016 March 2017 Ntl. Res. & Mining Construction Manufacturing Trade, Trans., Utilities Information Financial Activity Prof. & Bus. Serv. Ed. & Health Serv. Leisure & Hospitality Other Services Government -100 400 600 2,000 1,200 2,000 1,500 2,300 3,700 1,200 Total: 18,000 3,200-1,000 0 1,000 2,000 3,000 4,000 Source: Idaho Department of Labor
Idaho Employment Change Rates By County March 2016 to March 2017 State Rate = 2.7% Boundary -1.1% Bonner 4.9% Kootenai 2.3% Benewah -1.2% Latah 3.9% Nez Perce 2.8% Lewis -0.55% Shoshone 1.7% Clearwater -2.3% Idaho -0.4% 4.0% or more 2.7% to 3.9% 1.0% to 2.6% 0.0% to 0.9% Loss Adams 4.2% Washington Valley 0.5% Elmore -1.6% Source: Idaho Department of Labor, Seasonally Adjusted Total Nonfarm Employment 0.45% Custer Clark 0.2% -2.4% Payette 1.6% Gem 2.3% Canyon 2.7% Ada 2.8% Owyhee 0.7% Boise 2.8% Camas 1.6% Gooding 1.4% Twin Falls 2.1% Lemhi 2.0% Blaine 1.0% Lincoln 0.8% Jerome 2.8% Minidoka 1.1% Cassia 1.1% Butte 2.33% Power 0.2% Jefferson 2.3% Bingham 4.1% Oneida 2.3% Bannock -2.0% Fremont 4.7% MadisonTeton 5.4% 0.9% Bonneville 2.5% Caribou 0.6% Bear Lake Franklin -1.9% 1.3%
OR 4.0% 3.8% CA 5.0% 4.9% WA 4.9% 4.7% NV 4.9% 4.8% AK 6.4% ID 3.6% 3.5% UT 3.1% AZ 5.1% 5.0% Note: Seasonally Adjusted Source: Bureau of Labor Statistics ID Unemployment Rates 12 th Lowest in the Nation MT 3.8% HI 2.8% WY 4.7% 4.5% CO 2.9% 2.6% NM 6.7% 6.8% March 2017 U.S. Rate = 4.5% TX 4.9% 5.0% LA 5.7% 5.8% FL 5.0% 4.8% NH 2.7% 2.8% VT ND 3.0% 2.9% 2.8% MN 4.0% 3.8% NY WI SD 4.4% 4.3% 3.7% 3.4% 2.8% MI 5.3% 5.1% PA IA 5.0% 4.8% NE 3.2% 3.1% OH 3.2% 3.1% IL IN 5.1% 5.4% 4.9% 4.1% 3.9% WV VA 5.2% KS MO 4.9% KY 3.9% 3.8% 4.0% 3.8% 4.1% 3.9% 4.9% 5.0% NC 4.9% 5.1% TN 5.3% 5.1% OK AR SC 4.6% 4.3% 3.7% 3.6% 4.4% MS AL GA 5.2% 5.0% 6.2% 5.8% 5.3% 5.1% 3.9% or less 4.0% to 4.7% (at or below U.S. rate) 4.8% to 5.4% 5.5% to 5.9% 6.0% or more ME MA 3.0% 3.2% 3.4% 3.6% RI 4.3% 4.5% CT 4.7% 4.8% NJ 4.4% 4.2% DE 4.5% DC MD 5.7% 5.8% 4.2% 4.3%
Idaho Unemployment Rates By County March 2017 State Rate = 3.5% Boundary 5.5% Bonner 5.0% Kootenai 4.3% Benewah 6.9% Latah 3.2% Nez Lewis Perce7.0% 3.1% % Shoshone 7.0% Clearwater 9.0% Idaho 5.5% 3.0% or lower Adams 7.1% Valley 5.1% Lemhi 6.0% 3.1% to 3.6% 3.7% to 5.9% 6.0% to 6.9% 7.0% or greater Washington 5.6% Custer Clark 4.5% 2.0% PayetteGem 6.0% 4.2% Canyon 3.9 Ada 3.0% Owyhee 4.2% Boise 5.4% Elmore 4.1% Camas 3.1% Gooding 2.8% Twin Falls 3.2% Blaine 2.8% Lincoln 4.2% Jerome 3.1% Cassia 2.7% Butte 3.5% Minidoka 2.9% Power 3.6% Jefferson 2.7% Bingham 3.4% Bannock 3.3% Oneida 3.0% Fremont 2,8% Madison Teton 2.1% 3.0% Bonneville 2.9% Caribou 3.7% Bear Lake Franklin 3.4% 2.7% Source: Idaho Department of Labor
CA 4.5% WA 4.8% OR 4.5% NV 5.9% UT 5.6% AZ 4.3% Source: Bureau of Economic Analysis ID Personal Income Growth Same as National Average AK -1.0% ID 3.6% Percent Change in Personal Income : 2015 2016 U.S. = 3.6%; ID = 3.6% MT 2.3% WY -1.7% HI 4.5% CO 3.9% NM 2.1% ND -1.5% SD 1.2% NE 2.8% KS 2.8% TX 2.9% OK 0.6% MN 3.0% IA 2.3% MO 3.5% AR 3.2% WI 3.1% LA 1.5% IL 3.1% MS 3.2% MI 3.6% IN 3.9% TN 3.9% AL 3.3% 4.0% or more OH 3.0% KY 2.6% GA 4.8% WV 1.0% VT 3.3% PA 2.9% NC 4.1% SC 4.4% VA 3.6% FL 4.9% NH 4.7% NY 2.9% 3.6% to 3.9% (at or above the U.S. rate) 2.0% to 3.5% 0.0% to 1.9% Decrease ME 3.7% DC 4.5% CT 3.0% DE 2.9% MD 3.7% MA 4.3% RI 3.1% NJ 3.2%
Construction
Idaho Median Home Sale Prices Reaching Approaching Pre-Recession Highs $240,000 $220,000 $200,000 $180,000 $160,000 $140,000 $120,000 $100,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Idaho U.S. Source: Graphiq.com reporting data from CoreLogic
1.8 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 Idaho Maintains Lower Percentage of Foreclosures than Nation 2008 Percentage of total homes in foreclosure process 2009 2010 2011 2012 2013 2014 2015 2016 U.S. Idaho Source: Graphiq.com
25,000 Idaho Residential Construction Activity Slowly Climbing 20,000 15,000 10,000 5,000 0 1980 1985 1990 1995 2000 2005 Single-Family Units Multifamily Total 2010 2015f Source: U.S. Department of Commerce and U.S. Census Bureau
Millions $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 Idaho Value of New Residential Construction Increasing $0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Single Family Units Multi Family Units Total 2011 2012 2013 2014 2015f Source: U.S. Census Bureau
Meridian
Meridian At a Glance Population 90,739 Unemployment 3.0% Median Income - $54,746 Median Home Value - $213,100 Median Gross Rent - $987 Largest Employers Blue Cross Scentsy Forbes best places to retire 2016
Meridian is Experiencing Explosive Growth
Manufacturing and Construction Lead Jobs in Meridian
Meridian Unemployment Dropping
Housing Prices Increasing in Meridian
Idaho Economic Indicators 2016-2018 Population 1.4 1.5 1.4 Nonfarm Employment 3.1 1.8 1.9 Unemployment Rate 3.8 3.8 3.9 Personal Income 3 4.4 4.9 Housing Starts 3.4 12 23.8 0 5 10 15 20 25 2016 2017f 2018f Sources: Idaho Division of Financial Management and Moody s Economy.com e = estimate f = forecast
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