Idaho’s unemployment rate stabilized during later summer and early fall, hitting 6.8 percent in August and staying there in September before falling a tenth of a point to 6.7 percent in October. At the same time total employment continued to run well over 2 percent ahead of year-earlier levels as employers maintained payrolls at or slightly above the 10-year average in October. But jobs remained over 2 percent below their prerecession peak in 2007. Total job loss hit 8.8 percent in June 2010 with the worst year-over-year loss at 7.4 percent in July 2009. In 2006, Idaho had been among the national leaders in job growth. After 30 straight months of year-over-year job loss, total nonfarm jobs moved back into the black in October 2010. Job totals hovered just above year-earlier levels until mid-2011 when they began to show marked growth and have been over 2 percent every month in 2013, exceeding national job growth. Population growth since the recession hit has been less than half the rate of the previous decade and slipped to the national growth rate in 2012 for the first time in decades.
Idaho’s Gross State Product
The total value of all the goods and services produced in Idaho grew modestly to $58.2 billion in 2012, rising 2 percent in current dollars from a downwardly revised 2011 estimate. Adjusted for inflation, Idaho gross product was just under $51 billion, up only four-tenths of a point from 2011 and still below the prerecession peak of $51.4 billion. Idaho’s increases in both nominal and real terms ranked 46th among the states and were substantially below the national increases. Idaho’s population continued to grow faster than its inflation-adjusted gross product for the fifth time in the last seven years. Per capita gross product declined two-tenths of a percentage point in 2012 to $31,945, dropping below the 2004 level of just over $32,100. Growth in manufacturing, trade, information and financial services and government accounted for the gross state product increase in 2012 and more modest growth in construction, leisure, education and health services helped offset declines in mining, real estate and professional and business services.
Idaho's General Fund Revenues
General tax receipts were slightly under the administration projection through the first third of the 2014 state fiscal year and were running 4.6 percent ahead of the July-October period in FY2013. Individual income tax receipts were coming in just over expectations, but sales tax revenues while running 5.7 percent ahead of a year earlier, fell short of expectations over the first four months. Revenues for the 2013 fiscal year were 6.6 percent higher than FY2012. But because of several one-time economic events, the Otter administration revised its growth forecast for FY2014 down to 2.1 percent. After various adjustments, the new estimate for $2.81 billion reflects modest growth in the coming year. Total receipts for FY2012 were 6.3 percent ahead of FY2011. FY2013 was the third straight year of increased revenue after significant declines brought on by the recession.
New business filings with the Secretary of State rose 1.8 percent to 22,344 in 2012, the first significant increase since 2006 and another indication of the slowly improving recovery. Filings dropped under 22,000 in as the recession took hold in 2009 and then remained there in 2010 and 2011. The previous decline in filings before the most recent recession was in 2001 during that national recession.
After shedding jobs steadily for two and a half years, the Idaho economy stabilized in late 2010 and began growing again in mid-2011, picking up steam at the end of 2012 to match or exceed national growth rates. Nationally, nonfarm jobs in 2012 exceeded the 2011 average by 2 percent, matching Idaho’s growth. Idaho growth was pegged at 2.3 percent year over year in October, the lowest growth rate since January. The national economy created jobs at a 1.7 percent clip. Since growth resumed, the state has recovered about 75 percent of the jobs lost to the recession. Prerecession job levels should be regained by late 2014 or early 2015.
Number of People Working
Employment rose slightly in the early fall, exceeding 721,000 in both September and October. But that remained 1,000 short of the employment level in October 2012. The labor force also declined in October by 900 as the state’s labor participation rate – the percent of adults working or actively seeking work – dropped below 64 percent for the first time since 1981. This likely reflects the increasing size of Idaho’s population 55 and over – 25.3 percent in 2012, up from 19.6 percent in 2000 – and the increasing share of Idaho households where neither the householder nor the spouse was in the labor force – from 16.5 percent in 2007 to 20.1 percent in 2011. This was at least partly responsible for the first decline in the jobless rate since April. The rate had steadily declined for 21 months before that. Still the rate was six-tenths of a percentage point below the national rate and has been lower than the national rate for the past 12 years.
Unemployment Benefit Claims
Regular weekly unemployment benefit payments continued running well below the weekly levels posted since the Great Recession began and in early October finally slipped below the levels of 2007 levels, the final year of the state’s economic expansion. Recession-driven unemployment sent regular jobless benefit claims and payments to an unprecedented $403 million in 2009, nearly double the previous record of $210 million in 2008. That was nearly double the $123 million in 2007. Another $240 million was paid in federal extended and supplemental benefits in 2009 when over 116,000 workers – a quarter of the covered workforce – received assistance through the unemployment insurance program. Regular benefit payments totaled $214.8 million in 2011, 23 percent below the $278.3 million paid in 2010. Just over $195 million more was paid in federal extended benefits. The decline continued in 2012 with regular benefit payments slipping to $180.5 million and federal extended benefits totaling $118.3 million. For the first 10 months of 2013 total benefit payments at just over $167 million were nearly 35.5 percent lower than the first 10 months of 2012. Federally financed extended benefits at $36.3 million from January through October were off 60 percent from the previous year. Those benefits terminate in December.
Benefit payments were double the revenues paid into the trust fund in 2008, triggering a 70 percent increase in all unemployment insurance tax rates in 2009 from the record lows the year before. 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 in June 2009 to continue paying benefits. Rates hit their legal maximum in 2010, but that was not enough to cover the anticipated $278 million in regular benefit payments that year. Thirty-two other states also went broke and borrowed from the federal government. Idaho borrowed $202 million between July 2009 and April 2010 and repaid the loan in September 2011 through a bond issue. The bonds will be repaid in 2015 with revenue generated from the regular employer tax. The bond issue avoided federal surtaxes being imposed on Idaho businesses. State tax rates remained at their legal limit in both 2011 and 2012 before falling 18 percent in 2013. Another decline in tax rates is anticipated in 2014.
Rising wages offset lower business profits last spring, edging Idaho’s total personal income upward over $56 billion during the second quarter, four-tenths of a point higher than the first quarter estimate and a 3 percent increase over the year-earlier figure. Personal income had fallen over 5 percent in 2010 before bouncing back, rising 5.4 percent in 2011 and 3.3 percent in 2012. Wages rose nearly a full percentage point while business profits slipped 4.4 percent during the April-June quarter. Nationally personal income rose 1.2 percent in the second quarter compared to the first. Idaho personal income was falling until mid-2009 as the recession gripped the state economy.
Per Capita Personal Income
After falling over 6.4 percent in 2009, Idaho’s per-capita personal income rose 2.9 percent in 2010 and another 4.5 percent in 2011 to $33,436, up over $1,400 from 2010. The 3.9 percent increase in total personal income in 2012 was enough to finally push per capita personal income back above its prerecession level to $34,481. Nationally, per capita personal income rose 3.4 percent to $43,735 in 2012. Idaho’s per capita income remained 49th among the states, below all but Mississippi.
Continued strong precious metal purchases by Canadian kept Idaho’s third quarter exports ahead of 2012 and set businesses on a pace to sell more than $5.5 billion to foreign buyers. Third quarter exports totaled just under $1.44 billion – $3 million ahead of the third quarter in 2012 but $10 million short of the second quarter this year. Canada remained the state’s top market followed by China, and seven Asian nations accounted for over half the state’s export sales. Exports in 2013 were running 2.3 percent ahead of 2012’s record pace, but it was a half-billion-dollar fourth quarter aircraft purchase by Singapore that pushed 2012 exports over $6 billion for the first time.
The strongest summer and fall on record sent hotel and motel receipts soaring, putting Idaho tourism on a record pace. It was the first time that receipts exceeded $50 million every month from July through October. Revenues for the first 10 months totaled just under $390 million – 14 percent ahead of 2012 and 9 percent ahead of 2008 when receipts hit a record $407.6 million. Tourism has been estimated to account for about 5 percent of Idaho’s gross state product.