Idaho’s gross domestic product increased an estimated 2.8 percent in the second quarter of 2016, according to a Wednesday release from the Bureau of Economic Analysis at the U.S. Department of Commerce.
Analysts at the Idaho Department of Labor paid closer attention to the report than usual because the first quarter report showed the state economy declined by .2 percent, Labor research analyst supervisor Craig Shaul said. A second-consecutive quarterly decline would be, by definition, a recession.
“We were paying more attention to this report because the last one showed what might be a slowdown,” Shaul said.
But Shaul and the analysts received more good news: The first quarter numbers were adjusted to show 3 percent growth rather than a decline, signaling the state wasn’t on the verge of recession after all.
Shaul said he wasn’t shocked by the changes because indicators including the state’s low unemployment rate — just 3.8 percent in November for the fourth straight month — reflected a healthy economy. Adjusting previous estimates is common in national reports, he said.
However, with steady economic growth since the economic downturn, Shaul said analysts expect stagnation or decline in the future.
“Things been positive for so long, we’re looking for the storm on the horizon and expecting to see it,” Shaul said. “We’re looking at the constraint of the skilled labor force as hindrance to economic growth.”
The latest report showed that Idaho farms were the largest source of growth in the second quarter, followed by real estate. Garth Taylor, ag economist at University of Idaho, had predicted the gross state product would fall because most sectors had a dismal year fueled by poor commodity prices. Dairies —the state’s largest ag sector, struggled for a second-straight year.
An adjustment to ag revenue projections changed the outlook for the entire state economy, Taylor said.
“The real story is Idaho economy, at least for the last couple of quarters, has been swinging around with ag,” Taylor said.