Important Details
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Consumer Confidence

The Zions Bank Utah Consumer Attitude Index decreased 6.6 points to 96.3 in May. The U.S. Consumer Confidence Index increased 1.3 points to 83.0 in the same period.

Housing Market

In April, the CoreLogic® Home Price Index (HPI) for Utah—which measures home price appreciation—experienced a 8.5% year-over-year increase. Nationally, the HPI increased 10.5% during the same period.

Inflation

The Zions Bank Utah Consumer Price Index increased 0.1% from April to May for a trailing 12-month inflation of 1.4%. In the same period, the U.S. CPI increased 0.3% for a trailing 12-month inflation of 2.0%.

Job Report

Utah’s unemployment rate decreased 0.3 percentage points to 3.8% in April, while the national unemployment rate decreased to 6.3% in May.

July 2014

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Randy Shumway, Zions Bank Economic Advisor

Utah Economic Outlook

Randy Shumway, Zions Bank Economic Advisor

With summer upon us, the arts and cultural festival season is in full swing in Utah. While seasonal festivals are known for entertaining people across the state, they also contribute significantly to an important segment of Utah’s economy. Currently, Utah is home to 7,337 arts-related businesses that employ 28,093 people—accounting for almost five percent of the total number of businesses located in the state. Nationally, the arts, culture, and recreation industry contributed $163 billion to gross domestic product in 2013. While the arts industry positively affects the state’s economy year round, its impact is particularly noticeable during the summer months when arts and cultural festivals are held—bringing thousands of dollars of local and visitor spending to hosting communities. These festivals generate both economic activity and educational opportunities for their local communities—from Richmond in northern Utah to Kanab in the south.

Hosted in Logan during the month of July, the Utah Festival Opera demonstrates how arts festivals benefit local economies in Utah. This event features performances in restored venues in downtown Logan, including the Ellen Eccles Theater. Over 50 percent of the Festival Opera’s audience comes from out of state, bringing in economic activity that Cache Valley wouldn’t experience otherwise. As Opera connoisseurs fill hotels and restaurants in Logan for an entire month, they contribute to the Festival’s overall economic impact on the community, which exceeds $10 million annually. In addition, the Festival Opera provides extraordinary opportunities for Utah State University students to receive training from the performers, many of whom are full-time music professors and instructors. The Utah Shakespeare Festival in Cedar City beckons nearly 130,000 visitors each year to Iron County, and has an impact on the local economy in excess of $35 million. Along with generating substantial economic benefit, the Shakespeare Festival offers unique learning opportunities for children and teenagers who are out of school for the summer. Each year from January through April, the Utah Shakespeare Festival goes on tour with an educational outreach program for schools in Nevada, Utah, Idaho, and Arizona. The tour includes a 75-minute version of a Shakespeare play and a post-show discussion with the actors. This Shakespeare-in-the-Schools Tour brings theater to students who might otherwise never see a play written by Shakespeare. Although educational benefits are less immediately quantifiable than economic benefits, the festival enhances learning for Utah’s students.

Utah’s summer arts festivals enable community members of all ages to experience culture, learn about different forms of art and entertainment, and enjoy unique educational opportunities. They also contribute substantially to local and statewide economic growth.

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U.S. Economic Outlook

Short-term U.S. Outlook: Analysis of recent data indicates that the U.S. economy experienced lower first-quarter GDP growth than originally anticipated, but it is gaining momentum in the second quarter. In particular, investment in business inventory was lower than expected, but personal consumption expenditures rose 3.1 percent in the first quarter.

In late May, The Bureau of Economic Analysis (BEA) revised its real GDP growth estimate to negative 1.0 percent for the first quarter of 2014. The previous estimate released by the BEA indicated a decrease in GDP of 0.1 percent, but that estimate did not account for less-than-expected growth in several categories, including private inventory investment, exports, and state and local government spending. A decrease in state and local government spending was slightly offset by a rise in federal government spending and an increase in both personal consumption expenditures and imports in the first quarter.

Despite negative growth in the first quarter, recent months have provided evidence of a strengthening economy. Cash flow remains high relative to investment, and business confidence is rising, as evident in steadily-growing hiring rates.

U.S. consumer spending recorded its largest gain in more than 4.5 years in March. Consumer spending accounts for more than two-thirds of U.S. economic activity. When adjusted for inflation, consumer spending increased 0.7 percent in March and 0.4 percent in February. This was the largest gain since August 2009, and it put consumer spending on a strong upward trajectory heading into the second quarter.

Often, quarterly economic data can be volatile, and this has been the case since the economy came out of the recession. Although business inventory and private firm investment fell by roughly 1.6 percent, the upward trajectory of consumer spending provides incentive for companies to boost production and rebuild inventories. This will ultimately contribute to gains in GDP. In the first quarter, current-dollar GDP—the market value of the nation’s output of goods and services—increased 0.3 percent, or $11.7 billion.

Long-term U.S. Outlook: The nation’s long-term economic future continues to hinge on a range of global factors. The Crimean crisis serves as a reminder of the United States’ dependence on trade, and the risks involved in an increasingly global economy. In addition to addressing the unrest in Ukraine, the United States must continue to pay particular attention to China’s role in the global economy.

Although the U.S. surpassed China as the world’s largest economy in 1890, China’s purchasing power parity exchange rate is currently 20 percent higher than economists had previously estimated, according to data released by the International Comparison Program, a part of the United Nations. Purchasing power parity refers to the power of a unit of currency to be exchanged for an amount of goods or services. The higher the purchasing power parity, the more one receives in exchange for a unit of currency. The International Monetary Fund (IMF) had estimated that China’s economy would surpass the United States by 2019, but now they predict that this could happen as early as the end of this year.

While the U.S. economy is gaining momentum, geopolitical unrest and increasing global competition—particularly from China—have the potential to significantly impact long-term economic progress in the United States.

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utah labor utah labor

Labor Market

April was a positive month for Utah’s labor market as unemployment dropped three-tenths of one percent to 3.8 percent from 4.1 percent in March. Year-over-year nonfarm payroll grew by 36,800 jobs, and all ten private sector industry groups posted net job increases. Nationally, the unemployment rate in May remained steady at 6.3 percent. Nonfarm jobs grew by 217,000, leading U.S. payrolls to surpass their previous record set in January of 2008. The U.S. labor market is on something of a hot streak, adding at least 200,000 jobs each month for the last four months, the longest such stretch since 1999.

Having one of the most robust job markets in the country, Utah is currently tied with South Dakota for the fifth-lowest unemployment rate in the nation—trailing behind only North Dakota, Vermont, Nebraska, and Wyoming. Among states with a population of at least 2 million, Utah has the lowest unemployment rate in the nation. In 2012, Governor Herbert ambitiously encouraged Utahns to add 100,000 jobs in 1,000 days. At this point, the state is on pace to hit that economic mark sometime in June—about six months ahead of the deadline.

Utah’s job market growth rate continues to outpace the nation’s rate. For comparison, the gap in unemployment rates between Utah and the United States was only 1.5 percent in 2009, but it is now 2.5 percent. While the United States works to revitalize and expand the national job market, leaders could look to Utah as a model for growth.

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Housing Market

The Utah housing market continued its course of slow growth in April. According to the CoreLogic Home Price Index, home prices increased 2.1 percent nationally from March to April. This represents 10.5 percent growth when compared with April of 2013. In Utah, housing prices increased 1.4 percent over the same period, which represents an 8.5 percent increase over April 2013. Slow growth in home prices is becoming the new norm, and it may be awhile yet before home prices reach pre-recession levels. Nationally, home prices are still 14.3 percent below their pre-recession high; in Utah, home prices are still 12.6 percent below their peak.

A few underlying causes contribute to sluggish growth in home prices. One of these is a lack of home sales in the recent past. Throughout the winter and spring, low sales volume had a significant effect on home prices. Affordability is another important factor: when home prices increase faster than incomes do, home ownership moves out of reach for many people. As home values creep slowly toward their previous levels, this measured pace could serve as a healthy breather while incomes catch up.

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Zions Bank Utah Consumer Attitude Index

The Zions Bank Utah Consumer Attitude Index (CAI) decreased 6.6 points to 96.3 from April to May. This marks the first decrease in 2014 and the first decrease since October 2013. Although the CAI decreased this month, Utahns still manifest strong confidence in the state’s economy since the CAI has improved nearly 20 points over the past 12 months. For comparison, this month’s national Consumer Confidence Index® (CCI) increased 1.3 points to 83.0.

The Zions Bank CAI fell this month, primarily because of lower expectations for the trajectory of the economy. In particular, Utahns’ expectations for both business conditions and household income showed slight reduction from April to May. The percentage of people who think business conditions will be better six months from now declined from 31 percent to 29 percent, while the percentage of people who think business conditions will be worse six months from now increased from 6 percent to 10 percent. Eight percent of Utahns expect their household income to be lower six months from now (up from 4 percent), while the percentage of Utahns who expect their household income to be higher six months from now remained at 30 percent.

Utahns showed less concern about inflation this month. The percentage of people who expect prices for consumer goods to increase over the next 12 months declined to 77 percent from 84 percent. Very few consumers expect prices to go down: only 0.2 percent of Utahns expect prices to decline. However, 22 percent of Utahns think prices will stay the same (up from 15 percent). This is likely why Utahns are also less worried about inflation deteriorating their household income. The percentage of people who think their household income is likely to increase by more than the rate of inflation during the next two years rose to 26 percent from 22 percent last month.

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Zions Bank Utah Consumer Price Index

The Zions Bank Wasatch Front Consumer Price Index (CPI) increased 0.1 percent from March to April on a non-seasonally-adjusted basis. Over the last twelve months, prices have increased in Utah by 1.4 percent. The National Consumer Price Index, released by the Bureau of Labor Statistics, increased 0.3 percent from March to April on a non-seasonally-adjusted basis, and has risen 2.0 percent over the past twelve months.

Transportation costs increased 0.7 percent in the state from March to April. Unlike in previous months, rising gasoline prices were only partially responsible for the increase in transportation costs as the average price per gallon of gasoline increased only $0.02 from March to April. Instead, prices for both used and new cars rose in April, likely anticipating the increased demand that warmer weather typically brings. Car dealerships generally see strongest sales in the spring and summer months; in the fall and winter months when the weather changes, customers tend to shift budget priorities toward holiday-related expenditures.

Offsetting rising transportation costs to a degree, Utahns paid less for utilities in April than they did in March. Overall utility prices decreased 1.6 percent, largely from a nearly 9-percent reduction in the cost of natural gas for households. Because demand for natural gas is lowest in spring and fall months, utility companies typically charge a less expensive summer rate from April to October, and a more expensive winter rate from November to March. The timing of this rate decrease is consistent with past years.

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Utah Summer Athletics

While summer marks the beginning of festival season, it also marks a peak in athletic activities and events around the state—ranging from camps to leagues to the Utah Summer Games. Summer sports camps are held throughout the state on university campuses, allowing college coaches and athletes to share their knowledge and skills with aspiring high school athletes. Summer sports leagues also move into full swing, inviting Utahns of all ages to play on local teams and participate in local sporting events.

Sports enthusiasts from communities across the state come together in June each year for the Utah Summer Games, hosted in Cedar City. The Games include competition in a variety of sports—from running, basketball, and dance to power lifting, martial arts, and water polo. Since the games are open to youth and adults, people of all ages flock to the community to compete. It is not surprising that these popular Games also play a large role in southern Utah’s economy. For instance, each participant and his or her family members become customers of local Iron County hotels, restaurants, and stores. Since neighboring states Idaho, Nevada, and Wyoming don’t host their own summer games, the Utah Summer Games attracts numerous out-of-state athletes.

Total revenue for the community from the Games grows each year—during the 2013 Summer Games, Cedar City brought in over $450,000 in sales tax dollars alone. As athletes and their supporters arrive for competition, their disposable dollars positively impact the economy in southern Utah.

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Positive Lessons From Free Trade With Mexico

Over the last four decades, the United States experienced its largest-ever immigration surge as over 12 million workers and families from Mexico crossed the border northward in search of a brighter future. While the U.S. has welcomed vast waves of global immigrants over the course of its history, our country accommodates more immigrants from Mexico than from any other country.

In recent years, however, this tide of immigration from Mexico has been slowing—even reversing to a degree. While the financial crisis in the U.S. was undoubtedly a cause for decreased immigration, expanding economic opportunity in Mexico has played a large part in retaining its work force. Simply put, Mexico’s growing economy and rising standard of living reduces the incentive for workers and their families to go elsewhere for greater opportunity. A major element of Mexico’s recent economic growth is its increased emphasis on free trade.

Mexico’s economy changed trajectory in the late 1980s, when leaders from Mexico, Canada, and the U.S. negotiated a trade agreement designed to increase trade among the countries by removing duties attached to imports. In 1994, the North American Free Trade Agreement (NAFTA) inaugurated the largest free-trade region in the world, bearing an immediate and enormous impact on Mexico’s economy. Prior to NAFTA, Mexico’s exports peaked around $30 billion. However, within the first year of free trade, Mexico’s exports reached $70 billion. This number has grown upwards of 500 percent to $387 billion in the twenty years since NAFTA’s advent —more than doubling Mexico’s GDP during the same period.

In spite of free trade’s positive effects on economic growth, critics claim that trade partnerships are one sided—that, in this case, Mexico’s gain is America’s pain. However, U.S. export figures tell a different story. For example, last year Mexico imported 14 percent of all U.S. exports. Putting that figure into perspective, Mexico buys more U.S. goods than do Brazil, Russia, India, and China combined; or more than France, Germany, the Netherlands, and the United Kingdom combined. As far as free trade goes, this powerful rising tide lifts all boats.

Taking a cue from Mexico’s success, the U.S. can improve its economy by emphasizing free trade—particularly with the European Union. If our leaders come to consensus on the Transatlantic Trade and Investment Partnership with the E.U., the U.S. will be able to compete on equal footing in some of the largest economies in the world. One study from the Centre for Economic Policy Research in London concluded that a comprehensive transatlantic trade and investment agreement has the potential to add $122 billion annually to the American economy and $150 billion annually to the European economy.

Many sectors in the United States will be bolstered through free trade with the European Union, not least of which is agriculture. Last year, less than 7 percent of the United States’ $145 billion in total agricultural exports were imported by the European Union—the economy that accounts for nearly 20 percent of all global trade. From this perspective, opening free trade with the E.U. could greatly bolster our agricultural industry, thereby revitalizing our rural areas and increasing our number of export-based jobs.

In promoting free trade to strengthen our economy, we must also consider its impact on immigration because the two issues are interrelated on American soil. In the twenty years of free trade between the U.S. and Mexico, immigration has fallen from a rate of nearly 500,000 per year to 140,000 per year. Because free trade helps curb the flight of labor from one economy to another, we must encourage leaders to make improvements to immigration policies, while simultaneously expanding and promoting free trade agreements. These efforts will ensure labor is properly allocated within our markets and will continue to boost economic growth in the United States.

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Consumer Confidence

The U.S. Consumer Confidence Index® increased 1.3 points to 83.0 in March. The Present Situation Index fell 1.9 points to 80.4, while the Expectations Index 9.6 points to 96.3.

Housing Market

In April, the CoreLogic® Home Price Index (HPI) for Idaho—which measures home price appreciation— experienced a year-over-year increase of 8.3%. Nationally, the HPI increased 10.5% during the same period.

Inflation

The U.S. Consumer Price Index increased 0.3% from March to April. The index saw a year-over-year increase of 2.0%, which is within the Federal Reserve’s target annual inflation pace of 2–3%.

Job Report

Idaho’s unemployment rate decreased 0.2 percentage points to 5.0% in April, while the national unemployment rate remained at 6.3% in May.

July 2014

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Randy Shumway, Zions Bank Economic Advisor

Idaho Economic Outlook

Randy Shumway, Zions Bank Economic Advisor

With summer upon us, the arts and cultural festival season is in full swing in Idaho. While seasonal festivals are known for entertaining people across the state, they also contribute significantly to Idaho’s economy—generating thousands of dollars of local and visitor spending. Nationally, the arts, culture, and recreation industry contributed $163 billion to GDP in 2013. While the arts industry positively affects the state’s economy year round, its impact is particularly noticeable during the summer months when arts and cultural festivals are held. These festivals generate both economic activity and educational opportunities for their local communities—from the Festival at Sandpoint near the Canadian border, to the Idaho Shakespeare Festival in Boise, to the Trailing of the Sheep Festival in Hailey.

While festivals and events often involve considerable resource and budgetary expenditures for the communities that host them, the revenue and publicity they generate can return as much as 20 times the investment. For instance, the Trailing of the Sheep Festival in Hailey costs approximately $150,000 to host, but returns over $3.5 million to the local economy. Retail stores in the area experience a 20–40 percent increase in business during the weekend of the festival, which is held in early October each year. The Festival at Sandpoint welcomes over 20,000 visitors annually, more than half of whom come from outside the state. In 2012, festival sales totaled over $860,000. Coupled with $950,000 in visitor spending, total sales transactions generated $1.82 million for the local Sandpoint economy. While these summer events are noted for bringing visitors from out of state, they also create jobs and provide opportunities for local commerce. In fact, about 40 percent of revenue from Idaho arts and cultural festivals is derived from local purchases.

The Idaho Shakespeare Festival in Boise beckons over 105,000 visitors each year from May to September, producing about $1,785,000 in earned revenue and generating over $100,000 in sales tax revenues alone. Year round, the Idaho Shakespeare Festival only employs an average of 12 people, but during the festival season, it employs upwards of 195 people. Local businesses profit from the festival’s extended operating season via increased economic activity.

Along with generating substantial economic benefit, the Idaho Shakespeare Festival plays a critical educational role in the community, offering unique learning opportunities for children and teenagers who are out of school for the summer. For instance, the Idaho Shakespeare Festival’s school tours reach approximately 50,000 school-age children in Boise, including those in rural and under-served communities. The Festival also contributes to theater curricula in 73 percent of the school districts in Idaho. Although educational benefits are less immediately quantifiable than economic benefits, the festival makes a meaningful contribution to Idaho’s student body.

Idaho’s summer arts festivals enable community members of all ages to experience culture, learn about different forms of art and entertainment, and enjoy unique educational opportunities. They also contribute substantially to local and statewide economic growth.

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U.S. Economic Outlook

Short-term U.S. Outlook: Analysis of recent data indicates that the U.S. economy experienced lower first-quarter GDP growth than originally anticipated, but it is gaining momentum in the second quarter. In particular, investment in business inventory was lower than expected, but personal consumption expenditures rose 3.1 percent in the first quarter.

In late May, The Bureau of Economic Analysis (BEA) revised its real GDP growth estimate to negative 1.0 percent for the first quarter of 2014. The previous estimate released by the BEA indicated a decrease in GDP of 0.1 percent, but that estimate did not account for less-than-expected growth in several categories, including private inventory investment, exports, and state and local government spending. A decrease in state and local government spending was slightly offset by a rise in federal government spending and an increase in both personal consumption expenditures and imports in the first quarter.

Despite negative growth in the first quarter, recent months have provided evidence of a strengthening economy. Cash flow remains high relative to investment, and business confidence is rising, as evident in steadily-growing hiring rates.

U.S. consumer spending recorded its largest gain in more than 4.5 years in March. Consumer spending accounts for more than two-thirds of U.S. economic activity. When adjusted for inflation, consumer spending increased 0.7 percent in March and 0.4 percent in February. This was the largest gain since August 2009, and it put consumer spending on a strong upward trajectory heading into the second quarter.

Often, quarterly economic data can be volatile, and this has been the case since the economy came out of the recession. Although business inventory and private firm investment fell by roughly 1.6 percent, the upward trajectory of consumer spending provides incentive for companies to boost production and rebuild inventories. This will ultimately contribute to gains in GDP. In the first quarter, current-dollar GDP—the market value of the nation’s output of goods and services—increased 0.3 percent, or $11.7 billion.

Long-term U.S. Outlook: The nation’s long-term economic future continues to hinge on a range of global factors. The Crimean crisis serves as a reminder of the United States’ dependence on trade, and the risks involved in an increasingly global economy. In addition to addressing the unrest in Ukraine, the United States must continue to pay particular attention to China’s role in the global economy.

Although the U.S. surpassed China as the world’s largest economy in 1890, China’s purchasing power parity exchange rate is currently 20 percent higher than economists had previously estimated, according to data released by the International Comparison Program, a part of the United Nations. Purchasing power parity refers to the power of a unit of currency to be exchanged for an amount of goods or services. The higher the purchasing power parity, the more one receives in exchange for a unit of currency. The International Monetary Fund (IMF) had estimated that China’s economy would surpass the United States by 2019, but now they predict that this could happen as early as the end of this year.

While the U.S. economy is gaining momentum, geopolitical unrest and increasing global competition—particularly from China—have the potential to significantly impact long-term economic progress in the United States.

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idah labor

Labor Market

April was a positive month for Idaho’s labor market as unemployment dropped two-tenths of one percent to 5.0 percent from 5.2 percent in March. In more good news, this decrease in unemployment can be attributed directly to job growth, as the labor participation rate increased for the first time since June 2013. Total employment in Idaho hit an all-time high for the eighth month in a row, surpassing the 740,000 mark. The construction and manufacturing sector saw slightly above average hiring, and was responsible for a quarter of the new jobs produced. Nationally, the unemployment rate in May remained steady at 6.3 percent. Nonfarm jobs grew by 217,000, leading U.S. payrolls to surpass their previous record set in January of 2008. The U.S. labor market is on something of a hot streak, adding at least 200,000 jobs each month for the last four months, the longest such stretch since 1999.

Idaho continues to outpace the United States in job growth and unemployment indicators. With the sixteenth-lowest unemployment rate in the nation, Idaho beats the national average by 1.3 percent. Though the U.S. job market as a whole is also improving, Idaho’s job market is growing more quickly. For comparison, Idaho’s unemployment rate was only 0.5 percent lower than the nation’s rate in 2011, but now it is 1.3 percent lower. In continuing to add jobs and reduce the unemployment rate, Idaho has become a model of how to bounce back from the recession.

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U.S. Consumer Price Index

The national Consumer Price Index (CPI), released by the Bureau of Labor Statistics, increased 0.3 percent from March to April on a non-seasonally-adjusted basis, and the index has increased 2.0 percent over the past twelve months. Rising gasoline prices nudged the CPI higher this month: the index for gasoline prices rose 3.6 percent from March to April on a non-seasonally-adjusted basis. Residents of the Gem State have seen gasoline prices rise in recent months as well—from March to May, the average price for a gallon of gasoline in Idaho increased approximately 7 percent, or $0.25.

Over the past twelve months, the natural gas price index has increased significantly, up 11.8 percent. Residents in Idaho may see their utility bills rising over the coming months as natural gas prices move even higher because of low inventory levels. The United States’ colder-than-average winter reduced natural gas stockpiles to extremely low levels—so low, in fact, that they may not be replenished in time to meet demand for winter heating. According to the U.S. Energy Information Association, natural gas producers need to produce about 90 billion cubic feet of gas for storage each week for the next six months to meet the expected winter demand. This production level equates to about 25 billion more cubic feet each week than these companies have typically produced over the past five years. This supply shortage could raise natural gas prices and utility bills for residents of Idaho in the coming months if producers are unable to replenish inventory levels.

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U.S. Consumer Confidence Index

Consumer confidence inched up in May. The national Consumer Confidence Index® (CCI) (how consumers feel about the economy) increased 1.3 points to 83.0. The Present Situation Index (how consumers feel about their current business and employment situation) improved 1.9 points to 80.4, while the Expectations Index (how consumers feel about the economy six months from now) also slightly improved by 0.9 points to 84.8.

The CCI’s rise was primarily due to increased confidence in the labor market. For instance, those claiming jobs are “plentiful” rose to 14.1 percent from 13.0 percent, while those claiming jobs are “hard to get” decreased slightly to 32.3 percent from 32.8 percent. Moreover, those expecting more jobs six months from now increased to 15.4 percent from 14.7 percent. Consumers were also more upbeat about their potential earning power. The proportion of consumers expecting their incomes to be higher six months from now reached its highest level since December 2007—up to 18.3 percent from 16.8 percent.

Despite this month’s slight rise, consumer confidence has been relatively stagnant over the past two months, and this is reflected in current consumer spending trends. Personal consumption—a broad measure that captures spending on everything from food to utilities—declined a seasonally-adjusted 0.1 percent in April, according to the most recent report from the Commerce Department. Still, many analysts expect growth to rebound in May and accelerate through the summer, attributing April’s decline simply to weather-related distortions.

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Housing Market

The Idaho housing market continued its course of slow growth in April. According to the CoreLogic Home Price Index, home prices increased 2.1 percent nationally from March to April. This represents 10.5-percent growth when compared with April of 2013. In Idaho, housing prices increased 1.6 percent over the same period, which represents an 8.3 percent increase over April 2013. Slow growth in home prices is becoming the new norm, and it may be awhile yet before home prices reach pre-recession levels. Nationally, home prices are still 14.3 percent below their pre-recession high; in Idaho, home prices are still 18.6 percent below their peak.

A few underlying causes contribute to sluggish growth in home prices. One of these is a lack of home sales in the recent past. Throughout the winter and spring, low sales volume had a significant effect on home prices. Affordability is another important factor: when home prices increase faster than incomes do, home ownership moves out of reach for many people. As home values creep slowly toward their previous levels, this measured pace could serve as a healthy breather while incomes catch up.

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Idaho Film Festivals

Idaho is home to a range of interesting local film festivals, ranging from the Kiwanis Teen Film Festival, to the Idaho 48-Hour Film Competition, to the Idaho International Film Festival. Not only do these events help promote local talent in cinematography, screenwriting, and producing, but they also draw large crowds that boost local economic activity. Increased spending across lodging, recreation, and food consumption among in and out-of-state participants help pump more dollars through the city and state economies.

The Sun Valley Film Festival draws over 2700 participants annually, and has quickly become Idaho’s premier film festival. At the opening night of this year’s Sun Valley Film Festival, Governor Otter stated that in only three years, the festival is expected to yield an economic impact of over $7 million. The directors of the festival intentionally scheduled the event during a slower time of the year in an attempt to accommodate viewers both in and out of the state, thereby increasing potential economic gain for the city of Sun Valley.

Located in Boise, the annual 48-Hour Film Competition and Festival draws significant crowds. Teams of filmmakers from around the state are given 48 hours to write, pre-produce, cast, shoot, and edit an original short film. Participant and supporter dollars boost the local economy, primarily in lodging and food consumption revenue.

If recent film festival trends continue—growing in attendance and popularity—their economic impact will increase in Idaho’s local and state economies.

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Positive Lessons From Free Trade With Mexico

Over the last four decades, the United States experienced its largest-ever immigration surge as over 12 million workers and families from Mexico crossed the border northward in search of a brighter future. While the U.S. has welcomed vast waves of global immigrants over the course of its history, our country accommodates more immigrants from Mexico than from any other country.

In recent years, however, this tide of immigration from Mexico has been slowing—even reversing to a degree. While the financial crisis in the U.S. was undoubtedly a cause for decreased immigration, expanding economic opportunity in Mexico has played a large part in retaining its work force. Simply put, Mexico’s growing economy and rising standard of living reduces the incentive for workers and their families to go elsewhere for greater opportunity. A major element of Mexico’s recent economic growth is its increased emphasis on free trade.

Mexico’s economy changed trajectory in the late 1980s, when leaders from Mexico, Canada, and the U.S. negotiated a trade agreement designed to increase trade among the countries by removing duties attached to imports. In 1994, the North American Free Trade Agreement (NAFTA) inaugurated the largest free-trade region in the world, bearing an immediate and enormous impact on Mexico’s economy. Prior to NAFTA, Mexico’s exports peaked around $30 billion. However, within the first year of free trade, Mexico’s exports reached $70 billion. This number has grown upwards of 500 percent to $387 billion in the twenty years since NAFTA’s advent —more than doubling Mexico’s GDP during the same period.

In spite of free trade’s positive effects on economic growth, critics claim that trade partnerships are one sided—that, in this case, Mexico’s gain is America’s pain. However, U.S. export figures tell a different story. For example, last year Mexico imported 14 percent of all U.S. exports. Putting that figure into perspective, Mexico buys more U.S. goods than do Brazil, Russia, India, and China combined; or more than France, Germany, the Netherlands, and the United Kingdom combined. As far as free trade goes, this powerful rising tide lifts all boats.

Taking a cue from Mexico’s success, the U.S. can improve its economy by emphasizing free trade—particularly with the European Union. If our leaders come to consensus on the Transatlantic Trade and Investment Partnership with the E.U., the U.S. will be able to compete on equal footing in some of the largest economies in the world. One study from the Centre for Economic Policy Research in London concluded that a comprehensive transatlantic trade and investment agreement has the potential to add $122 billion annually to the American economy and $150 billion annually to the European economy.

Many sectors in the United States will be bolstered through free trade with the European Union, not least of which is agriculture. Last year, less than 7 percent of the United States’ $145 billion in total agricultural exports were imported by the European Union—the economy that accounts for nearly 20 percent of all global trade. From this perspective, opening free trade with the E.U. could greatly bolster our agricultural industry, thereby revitalizing our rural areas and increasing our number of export-based jobs.

In promoting free trade to strengthen our economy, we must also consider its impact on immigration because the two issues are interrelated on American soil. In the twenty years of free trade between the U.S. and Mexico, immigration has fallen from a rate of nearly 500,000 per year to 140,000 per year. Because free trade helps curb the flight of labor from one economy to another, we must encourage leaders to make improvements to immigration policies, while simultaneously expanding and promoting free trade agreements. These efforts will ensure labor is properly allocated within our markets and will continue to boost economic growth in the United States.

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