Utah is not headed into a recession, local financial experts said in response to a recent study by a nationally known economist that put the state "right on the edge" of an economic downturn.
Economist Al Sindlinger said that 28 states and the District of Columbia are in a recession and that Utah and 10 other states are edging toward financial trouble."He's just plain wrong," said R. Thayne Robson, head of the University of Utah Bureau of Economic and Business Research. "It's another case of New York people looking at their local conditions and generalizing about the rest of the nation."
Both Robson and Kelly Matthews, senior vice president and chief economist for First Security Bank, said increases in the number of jobs in the state as well as other economic indicators are proof that Utahns are in good shape financially.
"The Utah economy is showing growth rates of 4.9 percent over the last year in employment. It will be one of our best years in a decade," Robson said. "All of the Western states are strong."
Matthews said there is no evidence of a slowdown in growth in the quarterly economic report he is completing for the three-month period ending in July. "We're growing as fast as we ever have."
Even the Persian Gulf crisis is not likely to push Utah into a recession, Robson said. Both local and national experts fear confidence in the economy will falter, causing a decline in consumer spending.
But Robson said any drop in consumer spending in Utah will probably be offset by increases in defense spending. Matthews also noted that high gasoline prices could result in more oil wells being drilled in Utah.
According to economist Al Sindlinger, a household is determined to have negative liquidity when:
- Current income is lower than it was six months earlier; or,
- Income expectations for the next six months are lower; or,
- Fewer jobs are anticipated six months hence at the place of employment; or,
- Business conditions locally are expected to worsen.