Western Blue Chip Current Outlook
October 3, 2018
The states included in the Western Blue Chip Economic Forecast are Arizona, California, Colorado, Idaho, Montana, Nevada, New Mexico, Oregon, Texas, Utah, Washington, and Wyoming.
August non-agricultural job growth figures released by the U.S. Bureau of Labor Statistics show six Western states adding new jobs at a pace of 3.0% or greater on a year-over-year basis. Leading the pack is Utah (3.7%), followed by Nevada (3.5%), Washington (3.4%, Idaho (3.2%) and Arizona (3.0%).
Among the Western states, Montana had the slowest year-over-year job growth (1.8%), still faster than the national growth of 1.6% in August.
Year-to-date, the Western region accounts for nine of the top ten fastest job creation states through August. Utah again holds down the number one spot, followed in order by Idaho, Nevada, Washington, Texas, Colorado, Arizona, Oregon, Florida (the only non-Western entry), and California.
Among the largest metropolitan areas (with labor force greater than one million), the fastest year-over-year growth leader for August is Orlando, but the next nine slots are all held by Western metro areas. In order, Seattle is in second place followed by Las Vegas, Houston, Phoenix, Riverside, Austin, Dallas, San Jose, and Denver.
More information is available at Seidman’s Job Growth USA website.
The national unemployment rate was 3.9 percent in August. The lowest unemployment rate among the states was Hawaii’s 2.1%. The lowest rate among Western states was in Idaho (2.8%), ranking fifth lowest among all states. However, five Western states had August unemployment rates above the U.S. rate – California (4.2%), Nevada (4.5%), Washington (4.5%), Arizona (4.6%), and New Mexico (4.6%).
Personal income for all states grew 4.2% at an annual rate in the second quarter of 2018, according to figures released by the U.S. Bureau of Economic Analysis. Texas recorded the fastest growth, at 6.0%.
Western Blue Chip forecaster Bernard Weinstein of the Cox School at Southern Methodist University sends the following commentary:
“According to the BEA, second quarter income growth, compared with the first quarter of this year, has slowed both nationally and in the state of Texas. Still, the U.S. economy powers ahead with personal income expanding at a 4.2 percent annual rate during the second quarter. In Texas, income growth in the second quarter was 6.0 percent on annualized basis, the fastest among the 50 states. Though Texas’ strong performance is partly due to an uptick in oil and gas extraction, professional, scientific, and technical services were the leading contributors to the state’s earnings increase.”
Colorado (5th) and Montana (8th) were the only other Western states ranked among the top ten fastest growing for the quarter. The two fastest growing states in the first quarter, Washington and Utah, slipped from 10% growth to 1.6% and 3.4% respectively in the second quarter. Washington’s dip was particularly notable, dropping the state to 50th position in the second quarter.
With eight months of job growth data received for 2018, the Western forecasters are getting more comfortable with their projections for the current year. Job growth is expected to improve over 2017 in most states (see below), with the largest gain in Texas.
*Based on October 2018 forecasts
The Western Blue Chip forecasters are looking for slower job growth in 2019. The exceptions are Montana and New Mexico, where forecasters expect some modest job growth gains. The Idaho consensus is down by a full percentage point and the Washington forecast is down by just over one-half of a percentage point.