Slide 1

UTAHS CURRENT ECONOMIC OVERVIEW

April 2014

Mark KnoldSupervising EconomistUtah Department of Workforce Services1

EconomyAnatomy of a Business CycleTime

PeakTroughContractionExpansionRecoveryProsperity

State by State Employment DeclineSource: 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 2013. * Based on O-T-Y Not Seasonally Adjusted.607080900010Average per year: 3.1%Employment Change

EconomyAnatomy of a Business CycleTime

PeakTroughContractionExpansionRecoveryProsperity

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

EconomyAnatomy of a Business CycleTime

PeakTroughContractionExpansionRecoveryProsperity

State by State Recession Employment ReboundSource: 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 2014ThousandsUtah Employment2000 2013

Utah 16+ Population Estimate

Source: U.S. Bureau of Labor Statistics; January 2013, CPS Population EstimatesThousands

EmploymentLabor Force GrowthSource: U.S. Bureau of Labor Statistics; March 201466,000Utah Employment2000 2013

UnemploymentU.S. and Utah Utah Avg. Wage Growth and Unemployment Rate1991 - 2013Source: Utah Department of Workforce ServicesInverse Relationship

Utah Labor Force Percent Participation1990 2014PercentSource: U.S. Bureau of Labor Statistics; Local Area Unemployment Statistics

Utah LFP and UnRate2008 2014% LFPSource: U.S. Bureau of Labor Statistics; Local Area Unemployment StatisticsUn RateUnemployment rate drops while LFP declines; Implies discouragement or missing opportunities

Labor Force Participation That Left*2008 2014Source: U.S. Bureau of Labor Statistics; Local Area Unemployment Statistics* Diff between pre-recession level and recession

Labor Force Participation That Left2008 2014Source: U.S. Bureau of Labor Statistics; Local Area Unemployment StatisticsUnemployment rate drops while discouragement or missing opportunities increase

Utah Employment-to-Population Ratio1990 2014PercentSource: U.S. Bureau of Labor Statistics; Local Area Unemployment Statistics

Utah Employment-to-Population Ratio2008 2014% E-PopSource: U.S. Bureau of Labor Statistics; Local Area Unemployment StatisticsUn RateUnemployment rate decline not driven by employment gains

UnemploymentU.S. and Utah

Unemployment Rate2004 - 2014Note: Pre-recession variables is holding the labor force participation rate at pre-recession levels.

Labor Force 2004 2014Source: U.S. Bureau of Labor Statistics; Local Area Unemployment Statistics92,00066,000

Source: U.S. Bureau of Labor StatisticsChange in Labor Force Participation Rate2007 20112007 - 2013

Change in Labor Force Participation2007 2011(blue)2007 2013(gray)Source: U.S. Bureau of Labor Statistics

Natural ResourcesConstructionManufacturingTrade, Trans., UtilitiesInformationFinancial ActivitiesEducation and HealthGovernmentUtah Nonfarm Industry Profile (Numeric Change)2007 - 2013Prof., and BusinessLeisure and HospitalityOther ServicesSource: U.S. Bureau of Labor Statistics, QCEWEmployment loss from pre-recession peak to recession lowEmployment gain from recession low to September 2013

Source: Utah Dept. of Workforce Services; March 2014The 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 - 2013Employment

Source: Utah Dept of Workforce Services; March 2014The 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 - 2012Employment Change

Source: U.S. Bureau of Labor StatisticsPart-Time Employment in Utah1997 - 2012

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 - 2012Women Have A Higher Propensity for Part-Time Employment1997 - 2012Source: U.S. Bureau of Labor StatisticsUtah DataWould Rather Have Full-Time Employment in Utah*1997 - 2012Source: U.S. Bureau of Labor Statistics *% of part-time who would rather work full-time.Metro Areas Rebounding Faster Than the Non-Metro Areas2004 - 2013Source: Utah Department of Workforce ServicesStrong Rebound in the Provo Area2004 - 2013Source: Utah Department of Workforce Services

Source: U.S. Census Bureau, Local Employment DynamicsUtah Employment by Establishment Employment Size2000 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 2014Sold $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 2014Utah Expectation for 2014Job 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.

Source: Utah Department of Workforce Services; April 2014 f = forecastEmployment (000)Utah Employment2003 2014fMonthlyForecast

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 Forecast38

Utah Employment Growth by Establishment Employment Size2010 2012 Avg.Source: U.S. Census Bureau, Local Employment Dynamics

Utah Employment by Establishment Age2000 2012 Avg.Source: U.S. Census Bureau, Local Employment Dynamics

Utah Employment Growth by Establishment Age2010 2012 Avg.Source: U.S. Census Bureau, Local Employment Dynamics

County by County Recession Employment ReboundSource: U.S. Bureau of Labor Statistics, QCEW employmentFrom Pre-Recession Peak Employment to Current Employment

Utah County-Level Hachman Indices2012Source: Utah Dept. of Workforce ServicesDiminishing Diversity0.20.40.61.00.82003 2012 County Employment Growth and Hachman Indices

County by County Recession Employment ReboundSource: U.S. Bureau of Labor Statistics, QCEW employmentFrom Pre-Recession Peak Employment to Current EmploymentLowHighHighLowLowHighLowHighHighHighHighHighHighHighHighSource: U.S. Bureau of the CensusFemaleMaleUtahs Population by Age and Sex: 2010FemaleMaleU.S. Population by Age and Sex: 2010MillionsDominating the Labor ForceStretching the economy to accommodate new workersStretching the economy to accommodate new workersWorker VacuumWorker Vacuum