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SALT LAKE CITY — The state's economy continues to be strong, leaders of the Utah Legislature were told Tuesday.
"I'm actually very impressed with the report," Senate President Stuart Adams, R-Layton, said after legislative staff updated the Executive Appropriations Common on economic indicators. "You look at wages and salary growth; we're actually still growing faster than the national average."
That's encouraging consumer spending, the Senate president said, because Utahns "probably have a better impression" of the economy than most Americans since consumer sentiment is lower nationally. "If this is a recession, we're weathering it pretty well, it looks like."
The state's chief economist, Andrea Wilco, later clarified for the committee that "we're not in a recessionary period. We're growing but at a much slower rate than we were in the post-(COVID-19) pandemic." She described that as going "from an extreme to a normal state of growth. Slower, but certainly within the range."
Adams also cited mortgage debt dropping to 4% of disposable personal income from nearly 8% in 2008. That's lower than other consumer debt, such as what's owed on credit cards, vehicle purchases and student loans, now at 5.8%, on par with the historical average.
But Wilco pointed out the decline in the mortgage debt ratio is due to people hanging on to lower rate mortgages, tightening the housing market.
"In one sense, it's good that people are not increasing their debt ratio," she said.
The update stressed that consumer sentiment in Utah remains high as income and consumption grow in the state.
"Historically, Utah's residents tend to feel more confident than the national average when it comes to the economic future outlook. And as you can see, that still stands today, with Utah residents at 83 and the national consumer sentiment at 67.9," staff economist Alejandra Rodriguez told the committee.
Rodriguez said the nation's unemployment rate is "creeping upward" and "incited some fear" in July when it hit 4.3% because it appeared to trigger a recession indicator. But she suggested that was a false alarm, because that indicator can be "deceptively alarming when the workforce is expanding rapidly."
In Utah, unemployment was at 3% for the same time period, still low compared to historical rates, Rodriguez said. Plus, Utah still has high in-migration, so she said that may mean that "increased unemployment may be the result of an increase in supply rather than a decreased demand for labor."
There are more jobs being added, she said, but the pace of growth is slowing.
"After 3½ years of a consistently growing demand for labor, these dropping job opening rates may feel like a stark contrast. However, as you can see in the chart, we do see more job openings than we have unemployed individuals, although it is a close gap," Rodriguez said.
Wages and salaries are "well above" Utah's 5.8% average growth rate since 2000, she said, at 7.34% compared to 4.74% nationwide. "We're seeing solid wage growth in the last month, which should help support consumer spending. Overall, the labor market does seem to be tightening, but it remains strong by most measures."
And inflation continues to moderate, below national wage and salary growth at less than 3%. Another staff economist, Jared Gibbs, told the committee that "what this essentially means is consumers' purchasing power has been growing in the past few years even when we account for inflation."
Housing costs remain elevated, however, Gibbs said, although a rate cut is anticipated by the Federal Reserve.
House Budget Chairman Val Peterson, R-Orem, also was pleased with the report.
"It definitely shows that Utah is on the right track and continues to be a strong economy," Peterson said. "We hope to continue that in the future."
