Idaho economic forecast: on the sunny side

The latest economic forecast for Idaho predicts decent job and income growth for the state through at least 2021, despite the threat of trade wars and increasing odds of a recession.

The Division of Financial Management released the updated projections this week. The estimates are based in part on a national forecast supplied by IHS Markit.

The baseline estimate calls for 3.1 percent growth in Idaho's nonfarm employment this year, or an increase of about 22,000 jobs. That's expected to slow to about 2 percent per year over the next three years.

Personal income is projected to increase 4.5 percent this year, followed by 5.2 percent to 5.3 percent growth from 2019 to 2021.

"Most sectors in the Idaho economy have shown job growth last year and this year, and most are expected to continue that growth through next year," according to the forecast report.

Similar trends are expected nationally, according to IHS Markit, although job growth in Idaho, on a percentage basis, should be about double the U.S. average.

Neither the U.S. or Idaho forecast, however, factors in any negative consequences from the looming trade wars with Mexico, Canada, the European Union and China.

"Trade policy has yet to alter the forecast, though several different trade disputes have already arisen," the forecast notes.

Nevertheless, the report points out that exports account for about half of Idaho's crop production, including the bulk of the wheat grown in the state. It goes on to say that, if the North American Free Trade Agreement with Canada and Mexico collapses, "the Mexican economy would slip into a recession in 2019. Should that occur, the economy there would likely lose 1.2 million jobs, and unemployment would reach 7 percent."

The forecast also notes that the current economic expansion in the U.S. is in its 110th month - 10 shy of the all-time record, set in 1991-2001.

Forecasters give the baseline estimates about a 65 percent probability of reflecting actual conditions. An optimistic forecast, with stronger gross domestic product, income and job growth, has a 15 percent probability, while a pessimistic forecast - which has the U.S. dipping into recession in early 2019 - has a 20 percent probability.

The entire forecast report can be found online, at https://dfm.idaho.gov.

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Spence may be contacted at bspence@lmtribune.com or (208) 791-9168.