Idaho’s Economy Leads Recovery from Coronavirus

As of October, Idaho has recovered faster than most other states from the sudden, enormous economic losses caused by the coronavirus shutdowns in March and April. Idaho’s long-term population and economic growth gives it strong upward economic momentum. In addition, the shutdowns in the state at that time did not as severely restrict economic activity as it did in many other states.

Despite Idaho’s relative success, it’s not back to normal, and 26,400 more Idahoans were unemployed in October than in February, according to seasonally adjusted labor force statistics from the Idaho Department of Labor. In the uncertain atmosphere caused by COVID-19 and a global economic slowdown, it’s likely that restoring all the jobs lost during the pandemic will take several months.

Idaho’s unemployment rate compared with other states

In February, the U.S. seasonally adjusted unemployment rate of 3.5 percent tied for a record low, while the Idaho rate was 2.7 percent. Seven other states had lower rates. Alaska’s 5.8 percent was the highest rate.

As the pandemic shut down many parts of the economy, the U.S. unemployment rate soared to an all-time high of 14.7 percent in April. Idaho’s rate also jumped to a record high of 11.8 percent. Thirteen states had lower rates than Idaho ranging from 8.3 percent to 11.2 percent. Three states had rates above 20 percent — Hawaii, 23 percent; Michigan 23.8 percent; and Nevada, 24 percent.

By October, the U.S. seasonally adjusted unemployment rate had fallen to 6.9 percent, while Idaho’s rate moved to 5.5 percent. Thirty-three other states had higher rates than Idaho. Hawaii had the highest rate at 15.1 percent and Nebraska the lowest at 3 percent.

Idaho payroll jobs closest to pre-pandemic levels

U.S. seasonally adjusted nonfarm payroll employment was 7 percent lower in September than in February while Idaho jobs dropped 1.7 percent — the smallest drop among all 50 states. In four states — Hawaii, New York, Michigan and Massachusetts − job cuts were greater than 10 percent.

Idaho’s manufacturing sector showed the greatest strength compared to the other states. While U.S. manufacturing jobs in October were 5 percent lower than in February, Idaho enjoyed a small gain — 1.5 percent. Utah increased by 1.1 percent while manufacturing in both Alaska and Hawaii fell more than 20 percent.

Most of Idaho’s major manufacturing industries held steady including high-tech, food processing, and wood and paper products. The semiconductor industry seems poised to grow in coming months due to increased demand for memory chips from high-end computing − including cloud computing and rollout of the 5G mobile network. Lumber prices soared to all-time high of $900 per thousand board feet in recent months, buoying wood product employment. The hoarding of toilet paper and other tissue products this spring boosted Idaho’s paper industry. With more people pursuing outdoor activities during the pandemic, the state’s recreation technology companies that make equipment for hunting, fishing, whitewater sports, boating and camping, added jobs. While food processors that mostly sell to restaurants and cafeterias cut some jobs, other food processors in Idaho enjoyed a surge in demand for their products. The net result appears to be a small increase in jobs.

Construction’s vitality has helped Idaho. In only four other states does construction make up a larger share of nonfarm payroll jobs. Prior to the pandemic, construction provided 7 percent of Idaho’s nonfarm payroll jobs, compared with 5.3 percent of U.S. jobs. In addition, Idaho enjoyed faster growth in construction jobs since the pandemic began. U.S. construction jobs decreased 5.2 percent between February and October, while Idaho’s 1.1 percent increase ranked seventh highest for construction growth. The states with the fastest construction gains were South Dakota (9.4 percent) and Kentucky (5.4 percent). Three states lost more than 10 percent of their construction jobs between February and October.

Driving Idaho’s construction activity is its exceptionally strong population growth. Between 2014 and 2019, Idaho’s population rose faster than in any other state increasing by 9.6 percent, nearly three times faster than the nation’s 3.1 percent.

Retail employment fell 3.2 percent in the U.S. between February and October, while it rose 3 percent in Idaho. Four states had faster growth – Utah (5.7 percent), Arkansas (5.3 percent), Wyoming (4.5 percent), and Georgia (3.5 percent). The state with the largest decrease was New York, where retail jobs shrank 8.9 percent.

The main reason why Idaho’s retail sector outperformed other states is Idaho’s remarkable population growth during recent years. In addition, strong construction activity in the past couple of years has benefitted building material, garden supply, furniture, carpeting and appliance stores.

Leisure and hospitality was the hardest-hit sector in most states. Seasonally adjusted jobs in the sector plummeted 20.7 percent in the U.S. between February and October. Idaho leisure and hospitality jobs declined .7 percent. Five states experienced job losses greater than 30 percent with Hawaii experiencing the worst at 50.1 percent. The states where leisure and hospitality make up the largest shares of payroll jobs — Nevada, Hawaii and Florida — experienced the greatest job losses during the pandemic.

In general, urban areas across the nation have suffered greater losses in tourism activity than more rural areas. Cities that typically host big conventions, large amounts of business travel and considerable numbers of international tourists suffered massive declines in tourism. Rural areas offering lots of outdoor activities, like Idaho, saw the smallest declines.

Some of the wind in Idaho’s sails came from its long-term economic growth. While U.S. nonfarm payroll jobs grew 8.3 percent between December 2014 and December 2019, Idaho grew nearly twice as fast at 16.5 percent. Only Utah grew faster than Idaho at a rate of 17.4 percent. Nine other states grew more than 10 percent. Five states lost jobs during the five-year period.

Taking the pulse of Idaho households

This summer, the Census Bureau began a survey of American households that provides information about how the pandemic is affecting education, employment, food spending and insufficiency, housing issues, access to health care, and symptoms of anxiety and depression. The survey shows that the economic crisis precipitated by the pandemic has endangered the economic well-being of many Idahoans, but the crisis has caused relatively fewer problems for Idahoans than for their fellow Americans.

Highlights from the survey conducted during the week ending Sept. 14 are below:

In Idaho, 40.1 percent of households experienced a loss of employment income since March 13, compared with 46.1 percent of the total U.S. population.
About 58,800 Idahoans said they were not working because their employers experienced a reduction in business, went out of business or closed due to the pandemic.
About 7.3 percent of Idaho households with mortgages reported they were not currently caught up on their mortgage payments. That’s an estimated 39,157 Idaho households. About 9.8 percent of U.S. households were not current with their mortgage payments.
3 percent of Idaho homeowners with mortgages expressed no or slight confidence in their ability to make next month’s mortgage payments, compared with 11.6 percent in the U.S.
People representing the 16.9 percent of Idaho households that were not current on their mortgage payments said it was somewhat likely or very likely they would have to leave their homes due to foreclosure in the next two months, while 19.3 percent of all U.S. households responded similarly. That is about 6,600 Idaho households.
The pandemic economic crisis has led to food insufficiency in many Idaho households. Prior to March 13, 33,000 Idaho households with children said they sometimes or often did not have enough to eat. In September, that number rose to 42,000.

Taking the pulse of Idaho businesses

The Census Bureau also surveys businesses to learn about their experiences during the pandemic. In the survey for the week ending Sept. 21, no Idaho businesses responding said they thought their businesses would have to close in the next six months compared with 5 percent of U.S. respondents. About 14 percent of Idaho businesses said they need to obtain financial assistance or additional capital to survive during the next six months, compared with 22 percent of U.S. businesses. Idaho companies expressed greater confidence in the future when 30 percent said they would need to hire new employees in the next six months, compared with 24 percent of U.S. companies.