Zions Bank Economic Snapshot

Zions Bank Economic Overview
Understanding the Current Economic Environment
October 24, 2019

Longest Economic Expansion on Record
37
45
39
24
106
36
58
92
120
73
124
0 20 40 60 80 100 120 140
Oct-1945
Oct-1949
May-1954
Apr-1958
Feb-1961
Nov-1970
Mar-1975
Dec-1982
Mar-1991
Nov-2001
Jul-2009
Duration of Economic Expansion by Months
Source: National Bureau of Economic Research

108 Consecutive Months of Job Creation
-900
-700
-500
-300
-100
100
300
500
2007 2009 2011 2013 2015 2017 2019
Source: Bureau of Labor Statistics
ThousandsofJobs

Monthly Job Creation Continues to Slow
136
0
50
100
150
200
250
300
350
2017 2018 2019
Thousands of Employees
2017 Avg = 167
2018 Avg = 220
2019 Avg = 161

National Employment Change
Percent Change in National Employment by Industry: September 2018 to September 2019
0.7%
1.5%
2.1%
2.6%
2.1%
1.2%
0.5%
0.4%
0.9%
2.1%
0.1%
-2% -1% 0% 1% 2% 3%
Government
Other Services
Leisure & Hospitality
Ed. & Health Serv.
Prof. & Bus. Serv.
Financial Activities
Information
Trade, Trans., Utilities
Manufacturing
Construction
Ntl. Res. & Mining
Total: 1.4%

National Employment Change
Total Change in Number of Jobs by Industry in Thousands: September 2018 to September 2019
147
90
349
617
437
99
15
119
117
156
1
0 100 200 300 400 500 600 700
Government
Other Services
Ed. & Health Serv.
Prof. & Bus. Serv.
Financial Activities
Information
Manufacturing
Construction
Ntl. Res. & Mining

US Unemployment Rate
Lowest Level in 50 Years
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
11.0%
1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
4.5 - 5.0% = Full Employment
September 2019
3.5%

0.0%
5.0%
10.0%
15.0%
20.0%
1959 1969 1979 1989 1999 2009 2019
U.S. Unemployment Rate: 3.5% African American: 5.5% Hispanic or Latino: 3.9%
Source: U.S. Bureau of Labor Statistics
Unemployment Hitting Record Lows

0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0% 1955
1959
1963
1967
1971
1975
1979
1983
1987
1991
1995
1999
2003
2007
2011
2015
2019
4.5% - 5.0% = Full Employment
US Unemployment Rate
Near Lowest Level in 50 Years
Sept 2019
3.5%

Some States Seeing Unemployment Increase
Source: Wall Street Journal

62.0%
62.5%
63.0%
63.5%
64.0%
2013 2014 2015 2016 2017 2018 2019
Labor Force Participation Rose Steady
Sept 2019
63.2%

56%
58%
60%
62%
64%
66%
68%
1956
1959
1962
1965
1968
1971
1974
1977
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
2013
2016
2019
Labor Force Participation
Among Lowest Level in Almost 40 Years
Sept 2019
63.2%
Mar. 2000
67.3%
Apr. 1978
63.0%

Prime Age Labor Force Participation Increasing

Fewer than One Unemployed Worker Per Job Opening
0
1
2
3
4
5
6
7
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Unemployed/Openings
August 2019
0.86

Wage Growth Sliding
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
2007– 2019 Average: 2.5%
September 2019
2.9%

Inflation is Below the Fed’s 2% Goal
Source: Bureau of Economic Analysis
-2%
-1%
0%
1%
2%
3%
4%
5%
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Personal Consumption Expenditure Yearly Percent Change
Aug 2019
1.4%

Labor Productivity Rebounding?
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Real output per hour
PercentChangefromQuarterOneYearAgo

Source: Wall Street journal
Trade War Fears
Trade War Fears

Trade War Causes Shift in Imports
36.4%
22.5%
12.4%
6.9%
-12.3%
-20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0%
Vietnam
Taiwan
South Korea
Mexico
China
Change in US Imports From Year Before

China’s Economy is Struggling
Source: National Bureau of Statistics

Germany
Economic Weakness Throughout World
United Kingdom

30%
35%
40%
45%
50%
55%
60%
65%
2001 2004 2007 2010 2013 2016 2019
ISM Manufacturing Purchasing Manager’s Index (PMI)
Manufacturing Sector Weakest Since June 2009
Source: Institute for Supply Management
Sept. 2019
47.8%
Below 50 signals contraction

Manufacturing Sector Weakest Since June 2009
Source: Institute for Supply Management, Wall Street Journal

Economic Growth Slowed in Q2 2019
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
Q1-2012
Q2-2012
Q3-2012
Q4-2012
Q1-2013
Q2-2013
Q3-2013
Q4-2013
Q1-2014
Q2-2014
Q3-2014
Q4-2014
Q1-2015
Q2-2015
Q3-2015
Q4-2015
Q1-2016
Q2-2016
Q3-2016
Q4-2016
Q1-2017
Q2-2017
Q3-2017
Q4-2017
Q1-2018
Q2-2018
Q3-2018
Q4-2018
Q1-2019
Q2-2019
Gross Domestic Product
Personal Consumption Fixed Investment Net Exports
Inventories Government Real GDP Growth
2.0%

Gross Domestic Product Components

Business Confidence and Earnings Dropping

Consumer Confidence Slipped in September
50
70
90
110
130
150
2013 2014 2015 2016 2017 2018 2019
Above 110 indicates economic prosperity
Source: The Conference Board
Sept. 2019
125.1

.0%
.25%
.50%
.75%
1.0%
1.25%
1.50%
1.75%
2.0%
2.25%
2.50%
2015 2016 2017 2018 2019
Federal Funds Target Rate
0% - .25%
Will the Fed Continue Cutting in 2019?
Source: Federal Reserve Board of Governors
1.75% - 2.00%

0%
2%
4%
6%
8%
10%
1986
1989
1992
1995
1998
2001
2004
2007
2010
2013
2016
2019
Federal Funds Rate
The Fed Won’t Have Much Room
to Cut in the Next Economic Downturn
Source: Board of Governors of the Federal Reserve System

Student and Auto Loan Debt
Make Up the Majority of Non-Housing Debt
$0.0 T
$0.5 T
$1.0 T
$1.5 T
$2.0 T
$2.5 T
$3.0 T
$3.5 T
$4.0 T 2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Student Loan Auto Loan Credit Card Other
Recession
Student Loan
$1.48
Auto Loan
$1.30
Credit Card
$0.87
Other
$0.41
Source: Federal Reserve Bank of New York

Since the Start of the Great Recession Student Loan
Debt Balances have Continued to Climb
0
50
100
150
200
250
300
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Student Loan Auto Loan Credit Card Other
Recession
Source: Zions Bank Analysis of Federal Reserve Bank of New York Data
Index:Q42007=100
Student Loan
+170%
Auto Loan
+59%

Percent Change: 2017 to 2018
U.S. Rate = 0.6%
Loss
0.2% to 0.6%
1.5% +
0.0% to 0.1%
Utah Population 3rd Fastest Growing in U.S.
Source: U.S. Census Bureau
0.7% to 1.4%
DE
1.1%
DC
1.0%

-20,000
-10,000
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
0
300,000
600,000
900,000
1,200,000
1,500,000
1,800,000
2,100,000
2,400,000
2,700,000
3,000,000
3,300,000
3,600,000
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
Net Migration Population Change
32,968
3,161,105
25,019
2018
Sources: U.S. Census Bureau
TotalPopulation
ComponentsofPopulationChange
e = estimate, f = forecast
Utah Population and
Components of Change

Utah Population
Growth Rates
By County
2017 to 2018
State Average = 1.9%
Source: U.S. Census Bureau
1.0% to 1.8%
0.0% to 0.9%
1.9% to 2.9%
Loss
3.0%+
Rich
2.6%

Percent Change in Employment for States: August 2018 to August 2019
U.S. Rate = 1.4% UT Rate = 2.8%
1.0% to 1.5%
0.0% to 0.9%
Loss
1.6% to 1.9%
2.0% +
Utah Employment Growth 2nd Highest in the Nation
NH
1.9%

800
900
1,000
1,100
1,200
1,300
1,400
1,500
1,600
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
ThousandsofEmployees
Total Nonfarm Employment
Note: Numbers rounded to nearest thousand
Utah Total Employment at New Highs
Gain of 393,500
jobs from low in
2010
Loss of 92,100
jobs from
2007-2010

1.1%
2.8%
2.2%
5.0%
4.7%
2.7%
3.0%
0.8%
4.7%
5.4%
5.2%
-5% -3% -1% 1% 3% 5% 7%
Government
Other Services
Ed. & Health Serv.
Prof. & Bus. Serv.
Financial Activity
Information
Manufacturing
Construction
Ntl. Res. & Mining
Percent Change in Utah Employment by Industry: August 2018 to August 2019
Total: 3.0%
All Utah Industries Seeing Growth
Source: Utah Department of Workforce Services

2,500
1,200
3,400
10,000
10,200
2,400
1,200
2,400
6,300
5,800
500
-3,000 -1,000 1,000 3,000 5,000 7,000 9,000 11,000
Government
Other Services
Ed. & Health Serv.
Prof. & Bus. Serv.
Financial Activity
Information
Manufacturing
Construction
Ntl. Res. & Mining
Total: 45,900
All Utah Industries Seeing Growth
Total Change in Utah Employment by Industry: August 2018 to August 2019

Utah Manufacturing Appears to Defy Downturn
-2.0%
0.0%
2.0%
4.0%
6.0%
2017 2018 2019
Manufacturing Employment: Year-over-year percent change
Utah US Indiana Wisconsin Michigan
4.3%

Utah Employment
Change Rates
By County
August 2018 to
August 2019
State Rate = 3.0%
1.0% to 3.2%
0.0% to 0.9%
5.0% +
3.3% to 4.9%
Loss
Morgan
8.3%

Utah has 6th Lowest Unemployment Rate
August 2019 U.S. Rate = 3.7%, UT Rate = 2.8%
6.0% +
5.5% to 5.9%
4.8% to 5.4%
4.0% to 4.7%
3.9% or less
DC
5.6%

Utah’s Unemployment Rate
Is the Lowest Since 2007
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0% 2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Utah Unemployment Rate

Utah
Unemployment
Rates
By County
August 2019
State Rate = 2.8%
4.0% to 5.9%
6.0% to 6.9%
3.1% or lower
3.2% to 3.9%
7.0% +

Utah Personal Income Growth
2nd Highest in the Nation
Percent Change in Personal Income : 2017 - 2018
U.S. = 4.5%, UT = 6.3% ID = 5.4% WY = 4.5%
4.6% to 5.0%
4.1% to 4.5%
5.1% or more
3.6% to 4.0%
3.5% or less

DC
$85,750
NH
$81,346
MA
$86,345
CT
$72,812NJ
$74,146
MD
$86,223
Utah 9th Highest Median Household Income
2018 U.S. = $63,179, UT. = $77,067
$60,000 – 69,999
$50,000 to $59,999
$70,000 +
$45,000 to $49,999
$44,999 or less
HI
$77,765
RI
$66,266
DE
$65,012
VT
$65,361

Utah has the 6th Lowest Poverty Rate
2017 U.S. Rate = 13.4%, UT = 9.7%
18.1% +
15.1% to 18.0%
12.1% to 15.0%
10.1% to 12.0%
x

Utah Home Values
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
All homes
Utah Home Values U.S. Home Values
June 2009
$229,400
Source: Zillow Research
Aug 2019
$229,600
Aug 2019
$344,400

Utah Home Value Appreciation is Moderating
-12%
-8%
-4%
0%
4%
8%
12%
16%
20% 1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Year-over-year percent change
Utah: 8.1% US: 4.9%
Aug 2019
Utah
8.1%
Aug 2019
US
4.9%
Source: Zillow Research

Home Price Growth Continues to Slow Across the US
and in Top Markets
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
2014 2015 2016 2017 2018 2019
12-Month Percent Change in Home Values
Idaho Nevada Washington Florida Utah United States
Source: Zillow Research, Home Value Index

Economic Summary
• National and international uncertainty
• US economic expansion longest in US history
• Job growth above expectations
• Wage growth and inflation continue to disappoint
• Labor productivity looking good
• Manufacturing activity and trade wars drag on growth
• Interest rate cuts on the way?
• Regional employment growth remains strong
• Labor shortages in the West are becoming more pronounced

Robert Spendlove
Economic and Public Policy Officer
Email: Robert.Spendlove@zionsbank.com
Phone: 801-560-5394
Zions Bank, A Division of ZB, N.A. Member FDIC.
Content is offered for informational purposes only and should not be construed as tax, legal, financial or business advice. Please contact a
professional about your specific needs and advice. Content may contain trademarks or trade names owned by parties who are not affiliated
with ZB, N.A. Use of such marks does not imply any sponsorship by or affiliation with third parties, and ZB, N.A. does not claim any
ownership of or make representations about products and services offered under or associated with such marks.

Zions Bank Economic Snapshot

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