Zions Bank Economic Overview · Dow Tops 26,000 – Up 48% Since 2016 Election Source: Wall Street...

ZionsBankEconomicOverview

SaltLakeBoardofRealtors

• May30,2018

DowTops26,000– Up48%Since2016Election

Source:WallStreetJournal

Jan26,201826,616

Oct30,201617,888

DowAroundCorrectionTerritoryDownMorethanTenPercent


Jan26,201826,616

VolatilityReturnstotheStockMarket

19,00020,00021,00022,00023,00024,00025,00026,00027,000

Jan-2017

Feb-2017

Mar-2017

Apr-2

017

May-2017

Jun-2017

Jul-2017

Aug-2017

Sep-2017

Oct-2017

Nov-2017

Dec-2017

Jan-2018

Feb-2018

Mar-2018

Apr-2

018

May-2018

DowJonesIndustrialAverage

IsTheBitcoinBubbleComingtoanEnd?

$0$2,000$4,000$6,000$8,000$10,000$12,000$14,000$16,000$18,000$20,000

Jan-17

Feb-17

Mar-17

Apr-1

7

May-17

Jun-17

Jul-17

Aug-17

Sep-17

Oct-17

Nov-17

Dec-17

Jan-18

Feb-18

Mar-18

Apr-1

8

May-18

Source:Coindesk.com

Dec.16,2017$19,343

May29,2018$7,493

Jan.1,2017$997

+1,840% -61%

BusinessOptimismBooming

Source:TradingEconomics,NFIBSmallBusinessOptimismIndex

ConsumerConfidenceRemainsHigh

5060708090100110120130140

Nov-12

Feb-13

May-13

Aug-13

Nov-13

Feb-14

May-14

Aug-14

Nov-14

Feb-15

May-15

Aug-15

Nov-15

Feb-16

May-16

Aug-16

Nov-16

Feb-17

May-17

Aug-17

Nov-17

Feb-18

May-18

Above110indicateseconomicprosperity

Source:TheConferenceBoard

May2018128.0

OptimismBooming

Source:TradingEconomics,NFIBSmallBusinessOptimismIndex

Trumponomics•RepealandreplacetheAffordableCareAct• TaxReform• Increasespendingoninfrastructureandmilitary•Reducegovernmentregulations•Renegotiatetradedeals

•Butcantheygetitdone…?

USTaxReformOverview• Individual(Sunsetin2025)

• Smallchangestotaxrates• Increasestandarddeduction• Eliminatepersonalexemption• Doublechildtaxcredit• Lowermortgageinterestdeductionfrom$1mto$750k

• Capdeductionsforstateandlocaltaxesat$10,000

• Eliminatevariousitemizeddeductions• Removethehealthinsurancemandate(permanent)

• Corporate(Permanent)• Reducecorporatetaxratefrom35%to21%

• Pass-throughincomedeductionof20%• Repatriationofforeignincomeat15.5%(territorialtaxsystem)

• EconomicImpact• Scoreofaround$1.5trillion• ManyUScompaniesalreadyincreasingwagesandbonuses

• IncreaseGDPbyupto0.5%• Fedreaction?

EconomicGrowthSlowedattheStartof2018butRemainsStrong

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

2012

2012

2012

2012

2013

2013

2013

2013

2014

2014

2014

2014

2015

2015

2015

2015

2016

2016

2016

2016

2017

2017

2017

2017

PersonalConsumption FixedInvestment NetExports

Inventories Government RealGDPGrowth

Source:BureauofEconomicAnalysis

Q120182.3%

2018

AprilMarks91StraightMonthsofJobGrowth

-900

-700

-500

-300

-100

100

300

500

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Source:BureauofLaborStatistics

TheUSiscurrentlyinthe2nd longesteconomicexpansiononrecord

3745

3924

10636

5892

12073

107

0 20 40 60 80 100 120 140

October1945

October1949

May1954

April1958

February1961

November1970

March1975

December1982

March1991

November2001

July2009

DurationofEconomicExpansionbyMonths

Source:NBER

NationalEmploymentChangePercentChangeinNationalEmploymentbyIndustry:April2017toApril2018

0.0% 1.7% 1.7% 1.9%

2.5% 1.5%

-0.9% 1.1%

2.0% 3.7%

8.8%

-2% 0% 2% 4% 6% 8% 10%

GovernmentOtherServices

Leisure&HospitalityEd.&HealthServ.Prof.&Bus.Serv.FinancialActivity

InformationTrade,Trans.,Utilities

ManufacturingConstruction

Ntl.Res.&Mining

Total:1.6%


NationalEmploymentChangeTotalChangeinNumberofJobsbyIndustryinThousands:April2017toApril2018

399

279

431518

126-26

289245257

59

-100 0 100 200 300 400 500 600





Ntl.Res.&Mining


UnemploymentRateatLowest-LevelSinceDecember2000

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

11.0% 1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

5.0%=FullEmployment


April20183.9%

62%

63%

64%

65%

66%

67%

68%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

LaborForceParticipationFellSlightlyinApril

April201862.8%


56%

58%

60%

62%

64%

66%

68%

1956

1958

1960

1962

1964

1966

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

LaborForceParticipationAmongLowestLevelinAlmost40Years


April.201862.8

Mar.200063.7

Apr.197863.0%

BabyBoomersHeadforRetirement

20% 22% 24% 26% 28% 30% 32% 34% 36% 38%

60% 61% 62% 63% 64% 65% 66% 67% 68%

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

U.S.ParticipationRate Age55+ShareofWorkingAgePop

U.S.ParticipationRate

Shareof55+


Long-TermDeclineoftheTeenageWorkforce

30% 35% 40% 45% 50% 55% 60% 65% 70%

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

2017

U.S.LaborForceParticipationRate ParticipationRateAges16-19


StandardofLivingBestEver

OneUnemployedWorkerPerJobOpening

0

1

2

3

4

5

6

7

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Unemployed/Openings

March20181.0


AnnualWageGrowthDeclinedinApril

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

2007– 2017Average2.4%

April20182.6%


WageGrowthLaggingJobGrowth


Sources:BureauofLaborStatisticsandBureauofEconomicAnalysis;Note:CoreCPIandCorePCErepresentallitemslessfoodandenergy

0.0%

0.50%

1.0%

1.50%

2.0%

2.50%

3.0%

3.50%2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Year-overchange

U.S.CoreCPI U.S.CorePCE

TheFedisApproachingitsInflationTargetof2Percent

March2018CoreCPI2.1%

March.2018CorePCE1.9%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Source:U.S.FederalReserve

FederalFundsTargetRateSees6thIncreaseinOveraDecade

FederalFundsTargetRate

=1.50%to1.75%

March2018FedRateIncreaseProjections

Source:BoardofGovernorsoftheFederalReserve

2.1%

2.7% 3.1%

2.8%

2.1%

2.9% 3.4%

2.9%

0%

1%

2%

3%

4%

2018 2019 2020 LongerRun

Dec-17 Mar-18

FedRateIncreaseProjections

OilPricesRising


… WhichisCausingGasPricestoRise


HolyFrontierFireImpactingGasPricesAcrossIntermountainWest

Source:FederalReserveBankofSt.Louis

SaltLakeCity Boise


EconomicProtectionismIncreasesCosts


TradeWarsHurtGrowth

UtahEconomic Conditions

PercentChange:2016to2017U.S.Rate=0.7%

Loss

0.2%to0.6%

1.5%+

0.0%to0.1%

NM0.1%

UT1.9%

AZ1.6%

CA0.6%

NV2.0%

OR1.4%

TX1.4%

OK0.2%

CO1.4%

WA1.7%

ID2.2%

MT1.1%

WY-1.0%

ND0.0%

SD0.9%

MN0.9%

NE0.7%

KS0.3%

IA0.5%

MO0.4%

AR0.5%

LA0.0%

WI0.4%

IL-0.3%

IN0.5%

OH0.3%

FL1.6%

TN1.0%

KY0.4%

MS0.0%

AL0.3%

GA1.1%

SC1.3%

NC1.1%

VA0.7%

WV-0.7%

PA0.1%

NY0.1%

ME0.4%

AK-0.2%

HI-0.1%

MA0.5%

VT0.0%

NH0.6%

RI0.2%

CT0.0%

NJ0.4%

DE1.0%

MD0.5%

MI0.3%

DC1.4%

KS0.2%

UtahPopulation3rd Fastest GrowinginU.S.

Source:U.S.CensusBureau

0.7%to1.4%

PercentChange:2016to2017U.S.Rate=0.7%

Loss

0.2%to0.6%

1.5%+

0.0%to0.1%

UtahCounties’GrowthOutpacingNation


0.7%to1.4%

-20,000-10,000010,00020,00030,00040,00050,00060,00070,00080,00090,000

0300,000600,000900,000

1,200,0001,500,0001,800,0002,100,0002,400,0002,700,0003,000,0003,300,0003,600,000

1950

1955

1960

1965

1970

1975

1980

1985

1990

1995

2000

2005

2010

2015

NetMigration NaturalIncrease TotalPopulation

34,886

3,101,833

22,587

2017

Sources:U.S.CensusBureau

TotalPop

ulation

ComponentsofPopulationChange

e=estimate,f=forecast

UtahPopulationandComponentsofChange

UtahPopulationGrowthRatesByCounty

2016to2017StateAverage=1.9%


1.0%to1.7%

0.0%to0.9%

1.8%to2.9%

Loss

3.0%+

WasatchPopulationGrowthRates

ByCity2015to2016StateAverage=1.8%


1.0%to1.7%

0.0%to0.9%

1.8%to2.9%

Loss

3.0%+

SaltLakeCountyPopulationAverageGrowthRates

2010to2017

StateAverage=1.7%


1.0%to1.7%

0.0%to0.9%

1.8%to2.9%

Loss

3.0%+

UtahCountyPopulationAverageGrowthRates

2010to2017

StateAverage=1.7%


1.0%to1.7%

0.0%to0.9%

1.8%to2.9%

Loss

3.0%+

DavisCountyPopulationAverageGrowthRates

2010to2017

StateAverage=1.7%


1.0%to1.7%

0.0%to0.9%

1.8%to2.9%

Loss

3.0%+

WeberCountyPopulationAverageGrowthRates

2010to2017

StateAverage=1.7%


1.0%to1.7%

0.0%to0.9%

1.8%to2.9%

Loss

3.0%+

PercentChangeinEmploymentforStates:Apr.2017toApr.2018U.S.Rate=1.6%UTRate=3.3%


1.0%to1.5%

0.0%to0.9%

Loss

1.6%to1.9%

2.0%+

UtahisTiedfor2nd FastestEmploymentGrowth

800

900

1,000

1,100

1,200

1,300

1,400

1,500

1,6001996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Thou

sand

sofEmployees

TotalNonfarmEmploymentSource:U.S.BureauofLaborStatisticsNote:Numbersroundedtonearestthousand

UtahTotalEmploymentatNewHighsGainof334,900jobsfromlowin

2010

Lossof92,000jobsfrom2007-2010

1.7% -1.5%

4.8% 2.7%

4.5% 2.3%

1.3% 4.2%

2.8% 7.5%

-2.4%

-13% -8% -3% 2% 7% 12%





Ntl.Res.&Mining

PercentChangeinUtahEmploymentbyIndustry:April2017toApril2018

Total:3.4%

UtahIndustriesSeeingGrowth

Source:UtahDepartmentofWorkforceServices

4,100

-600 6,900

5,4009,100

1,900500

11,6003,600

7,100-200

-3,000 -1,000 1,000 3,000 5,000 7,000 9,000 11,000 13,000





Ntl.Res.&Mining

Total:49,400

UtahIndustriesSeeingGrowthTotalChangeinUtahEmploymentbyIndustry:April2017toApril2018


ChangesandDifferencesBetweenUSandUtahEconomies

Source:Kem C.GardnerPolicyInstituteAnalysisofBEANationalandProductAccountData

ChangesinUtah’sTaxbase

Source:Kem C.GardnerPolicyInstituteanalysisofUtahofficeofLegislativeResearchandGeneralcounseldata

UtahEmploymentChangeRatesByCounty

April2017toApril2018StateRate=3.4%

1.0%to3.2%

0.0%to0.9%

5.0%+

3.3%to4.9%

Loss


VT3.4%

NH4.4%

MA3.8%

RI3.5%CT

3.9%NJ2.7%

MD2.6%

DC5.7%


UtahHasthe11th LowestUnemploymentRateApril2018U.S.Rate=3.9%;UT=3.1%

6.0%+

5.5%to5.9%

4.8%to5.4%

4.0%to4.7%

3.9%orless

UtahUnemployment

RatesByCounty

April2018

StateRate=3.1%


4.0%to5.9%

6.0%to6.9%

3.1%orlower

3.2%to3.9%

7.0%+

DE2.5%

VT3.4%

NH4.4%

MA3.8%

RI3.5%CT

3.9%NJ2.7%

MD2.6%

DC5.7%


UtahPersonalIncomeGrowth3rd HighestintheNationPercentChangeinPersonalIncome:2016- 2017

U.S.=3.1%,UT=4.4%ID= 4.7%

3.6%to3.9%2.0%to3.5%

4.0%ormore

0.0%to1.9%Decrease

2016U.S.Rate=14.0%,UtahRate=10.1%

Source:U.S.CensusBureau,AnnualCommunitySurvey1-yearestimate

NM19.8%

UT10.1%

AZ16.3%

CA14.3%

NV13.8%

OR13.3%

TX15.6%

OK16.3%

CO11.0%

WA11.3%

ID14.4%

MT13.3%

WY11.3%

ND10.6%

SD13.3%

MN9.9%

NE11.4%

KS12.1%

IA11.8%

MO14.0%

AR17.1%

LA20.1%

WI11.8%

IL13.0%

IN14.1%

OH14.6%

FL14.6%

TN 15.8%

KY18.5%

MS20.8%

AL17.1%

GA16.0%

SC15.3%

NC 15.4%

VA11.0%

WV17.8%

PA12.9%

NY14.6%

ME12.5%

AK9.9%

HI9.3%

MA10.4%

VT11.9%

NH7.2%

RI12.8%

CT9.8%

NJ10.4%

DE11.6%

MD9.6%

MI15.0%

DC18.6%

15.1% to 18.0%12.1% to 15.0%

10.0% or less

10.1% to 12.0%

18.1% +

UtahPovertyRate7th LowestintheNation

UtahConsumerConfidenceHitsNewHigh

5060708090100110120130140

Jul-12

Nov-12

Mar-13

Jul-13

Nov-13

Mar-14

Jul-14

Nov-14

Mar-15

Jul-15

Nov-15

Mar-16

Jul-16

Nov-16

Mar-17

Jul-17

Nov-17

Mar-18

U.S.ConsumerConfidenceIndex:127.7

ZionsBankUtahConsumerAttitudeIndex:129.5

Above110indicateseconomicprosperity

Sources:ConferenceBoardandCiceroGroup

UtahvsUSInflation

-1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5%

Jul-2

011

Oct-2011

Jan-2012

Apr-2

012

Jul-2

012

Oct-2012

Jan-2013

Apr-2

013

Jul-2

013

Oct-2013

Jan-2014

Apr-2

014

Jul-2

014

Oct-2014

Jan-2015

Ap

r-2015

Jul-2

015

Oct-2015

Jan-2016

Ap

r-2016

Jul-2

016

Oct-2016

Jan-2017

Ap

r-2017

Jul-2

017

Oct-2017

Jan-2018

Apr-2

018

UnitedStatesCPI:+2.5% ZionsBankWasatchFrontCPI:+3.9%

Source:U.S.CPIfromNationalBureauofLaborStatisticsandWasatchFrontCPIfromCiceroGroup

Utah3.9%

US2.5%

Year-over-y

earp

ercent

change

Utahhomevaluescontinuetorise

$95,000$115,000$135,000$155,000$175,000$195,000$215,000$235,000$255,000$275,000

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

UnitedStates Utah

UtahDec.2017$262,200

U.S.Dec.2017$206,300

Source:ZillowResearch

UtahResidentialConstructionActivityContinuestoRise

0

5,000

10,000

15,000

20,000

25,000

30,000

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

Single-FamilyUnits Multifamily Total

Forecast

Source:Ivory-BoyerConstructionDatabase,Kem C.GardnerPolicyInstitute

HouseholdCreationSurpassesHousingUnits

Source:Kem C.GardnerPolicyInstitutePopulationProjectionsandIvoryBoyerConstructionDatabase

MultigenerationalHouseholdsontheRise


UtahValueofNewResidentialConstructionIncreasing

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

Residential Nonresidential Renovations Total

Forecast

MillionsofD

ollars

Source:Ivory-BoyerConstructionDatabase,Kem C.GardnerPolicyInstitute

HomePricesIncreasingFasterThanWages


Sources:StateofUtahRevenueAssumptionsWorkingGroup,Moody’sEconomy.com,IHSGlobalInsights e=estimatef=forecast

0 1 2 3 4 5 6 7 8 9

RetailSales

HomePrices

PersonalIncome

UnemploymentRate

NonfarmEmployment

Population

2016 2017e 2018f 2019f

UtahEconomicIndicators2016-2019f

RobertSpendloveEconomicandPublicPolicyOfficer

Email:[email protected]:801-560-5394

ZionsBank,ADivisionofZB,N.A.MemberFDIC.

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Zions Bank Economic Overview · Dow Tops 26,000 – Up 48% Since 2016 Election Source: Wall Street...

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Transcript of Zions Bank Economic Overview · Dow Tops 26,000 – Up 48% Since 2016 Election Source: Wall Street...