Western Blue Chip Current Update

November 9, 2021

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.

THE “GREAT RESIGNATION” HITS THE WESTERN STATES

The U.S. economic recovery from the pandemic recession of 2020 has been affected by supply chain kinks and labor shortages.  Analysts say the supply chain issues are not unexpected, as consumers are still spending on goods rather than services, and businesses are increasing their orders for materials and inventory as demand increases.  In brief, the supply chain is on overload, and distribution has been slowed by constraints related to ports, trucking, and warehouse capacity, as well as worker shortages.

Several explanations for the current labor shortages have been offered.  COVID fears still linger among many workers, and child care availability has kept others at home.  Some workers have been able to be more choosy about employment options due to an accumulation of savings from generous benefit programs during the peak of the pandemic.

Meanwhile, quit rates for workers have increased to near record levels in the past few months.  As U.S. quits rose to 4.2 million in August 2021, the surge in quit rates became known as the “Great Resignation,” with quits up in every state, including the Western states (see table).

 

Quit Rates in the Western States

State August 2020 August 2021 Quit Rate
  Quits Rate Quits Rate Percentage Change
Arizona 64,000 2.3% 90,000 3.0% 40.6%
California 252,000 1.6% 408,000 2.5% 61.9%
Colorado 64,000 2.4% 94,000 3.4% 46.9%
Idaho 19,000 2.5% 32,000 4.1% 68.4%
Montana 14,000 3.0% 16,000 3.3% 14.3%
Nevada 25,000 2.0% 47,000 3.5% 88.0%
New Mexico 19,000 2.4% 26,000 3.2% 36.8%
Oregon 38,000 2.1% 58,000 3.1% 52.6%
Texas 295,000 2.4% 379,000 3.0% 28.5%
Utah 39,000 2.5% 42,000 2.6% 7.7%
Washington 54,000 1.7% 82,000 2.4% 51.9%
Wyoming 6,000 2.2% 8,000 2.9% 33.3%
United States 2,987,000 2.1% 4,270,000 2.9% 43.0%

Source: U.S. Bureau of Labor Statistics (seasonally adjusted)

 

The latest data available from the U. S. Bureau of Labor Statistics are from August 2021, when the seasonally adjusted U.S. quit rate was 2.9%, up from 2.1% one year before.  Analysts say the “normal” quit rate over the long term would be approximately 2%, suggesting an overall turnover in nonfarm employment of about 25% for a typical year.  Among the Western states, the highest quit rate in August was recorded in Idaho (4.1%).  Quit rates in California (2.5%), Utah (2.6%) and Washington (2.4%) were below the national rate, but quit rates were higher for all other states (Wyoming matched the U.S. at 2.9%).

For the nation, quit rates were 43% higher in August 2021 compared to one year before.  Among the Western states, the greatest percent increase in quit rates were seen in Nevada (88%) and Idaho (68.4%).

 

SPOTLIGHT ON TEXAS

“Texas had strong job growth in September and seems poised for further short-term gains. Major new locations bode well for future expansion.  The state faces long-term challenges (restrictive social legislation, educating a growing future workforce, keeping pace with infrastructure demands, etc.), but nonetheless has many advantages which should serve it well.”

Dr. Ray Perryman, President and CEO,The Perryman Group