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Idaho Economic Indicators
Jan. 27, 2010
The recession cut deeply into the Idaho economy, claiming over 57,000 jobs between December 2007 and December 2009. Year-over-year job loss peaked at 7.5 percent in August 2009 – nearly 50,000 jobs lost in 12 months. It was the deepest year-over-year job loss since World War II, surpassing the 5.5 percent loss at the depth of the double-dip recessions of the early 1980s. Only two years earlier, Idaho had been among the national leaders in job growth. Since August the year-over-year gap has been closing as job loss appears to have stopped and some prerecession seasonal patterns returned. Idaho’s unemployment rate remained at 9.1 percent in December, the highest rate in 26½ 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. 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 cut another 1.2 percent from its FY 2010 general tax revenue forecast to just under $2.35 billion. It was the third reduction in the estimate in the past year, cutting anticipated receipts by nearly 5 percent from FY2009. Overall, the administration estimates that state tax receipts have dropped by nearly $550 million in the last two years. Persisting weakness in income and sales tax receipts since mid-2008 reflected the toll the national recession has taken 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 2007 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 nearly 50,000 between August 2008 and August 2009, a 7.5 percent loss. The gap began closing in September, October and November but only because job loss was so severe in the final months of 2008. The year-over-year loss in November was just over 33,000 jobs. November nonfarm jobs totaled 607,100. That was down 5.2 percent from a year earlier and below 2007, 2006 and 2005. Nationally, nonfarm jobs fell 3.4 percent in November 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 over 45 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. Health care was the only sector with a year-over-year gain.
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 2009 along with others in the industry including MPC and Hewlett-Packard. Since high-tech manufacturing jobs peaked at 17,300 in November 2006, the state has lost nearly 7,000. The overall high-tech 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
Total employment slipped to 685,000 in December, more than 28,000 fewer than a year earlier. It was the 10th straight month of employment under 700,000 and the 23nd month in a row that employment has been below year-ago levels. Total unemployment was nearly 69,000 as the jobless rate remained at 9.1 percent. Idaho’s 4 percent employment decline over the previous 12 months compared to a 3.8 percent national employment decline nationally as the country’s jobless rate held at 10 percent in December.
The rapid escalation of Idaho’s unemployment rate has hit every corner of the state. Half of Idaho’s 44 counties had double digit rates in December, and every county had a rate higher than a year earlier.
Rising unemployment drove jobless benefit claims and payments to unprecedented levels in 2009. The regular benefit payout totaled $403 million, nearly double the previous record of $210 million in 2008, which was nearly double the $123 million in 2007. Another $240 million was paid in federal extended and supplemental benefits in 2009. Over 116,000 workers received assistance through the unemployment insurance program in 2009. Regular benefit payments and the number of workers getting them finally slipped below the year-earlier level the last week of 2009 and have been running below year-earlier levels during January.
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 rate decreases in both 2007 and 2008 brought the tax to its lowest point on record. But the higher rates in 2009 covered only a third of the regular benefit payments, prompting the state to begin borrowing from the federal government to continue paying benefits in June. Rates hit their legal maximum in 2010, and that was expected to barely be enough to cover the anticipated $265 million in regular benefit payments in 2010. Twenty-six other states have gone broke and borrowed from the federal government, and more are teetering on the edge. Source: Idaho Department of Labor
Personal Income
Total personal income in Idaho edged up in the third of quarter of 2009, marking the second straight quarterly gain after three quarterly declines. Modest gains in wages and profits were offset by a decline in Social Security benefits that had been augmented in the second quarter with a one-time economic stimulus check for $250 to every beneficiary. The dramatic increase in unemployment benefits was behind the 0.2 percent personal income gain on an annualized basis. It was the second straight quarter that jobless benefits were the reason personal income grew. On an annualized basis, personal income totaled just under $49 billion for the July-September. The government revised income figures for 2006 through 2008, pushing personal income in 2008 up 2.9 percent to exceed $50 billion 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
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 metropolitan 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
Idaho Exports
After hitting a record of nearly $5 billion in 2008, foreign sales of Idaho goods and services plunged during the first half of 2009 before finally reviving to more than $1 billion again in the third quarter.
The early year decline followed the bottom falling out of the computer chip market. Chip sales rebounded slightly in the second quarter before posting a solid 38 percent gain in the third quarter. Total exports were up 24 percent, but foreign sales for the first nine months of the year at $2.75 billion remained 30 percent below the same period in 2008. Source: Global Trade Information Services of the U.S. Census Bureau
A record-setting October significantly closed the gap between 2009’s tourism tax receipts and the record set in 2008. Collections in October exceeded $60 million for the first month ever, totaling $63.6 million. The previous highest one-month total was just over $50 million in September 2007. Revenue in November slipped to just $16.5 million, significantly below the typical $20 million to $25 million collected during November in recent years. Still receipts through the first 11 months of 2009 totaled $326.6 million. That was 14.4 percent below revenues during the first 11 months of 2008. The gap was nearly 22 percent in September. Higher travel costs and the steadily increasing economic impact of the recession 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. Tourism has been estimated to account for about 5 percent of Idaho’s gross state product. Source: Idaho Tax Commission
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