Moody's Talks - Inside Economics - Lessons from the Beehive State

Episode Date: December 23, 2025

Mark and Cris are joined by Natalie Gochnour, associate dean in the David Eccles School of Business and director of the Kem C. Gardner Policy Institute at the University of Utah, and Moody’s Analytics’ head of regional economics Adam Kamins to learn some of the secrets behind one of the nation’s most successful states.  From demographics to governance to the ski slopes, Natalie shares lessons learned from her decades working in and for Utah, including what to call residents of the Beehive State (hint: don’t even think about adding a second “a.”).The gang also talks about newly-released third quarter GDP data and The Conference Board’s most recent consumer confidence survey. Finally, Mark capitalizes on his knowledge of Cris’s mannerisms to claim victory in the stats game.Guest: Natalie Gochnour, Associate Dean in the David Eccles School of Business and Director of the Kem C. Gardner Policy InstituteHosts: Mark Zandi – Chief Economist, Moody’s Analytics, Cris deRitis – Deputy Chief Economist, Moody’s Analytics, and Marisa DiNatale – Senior Director - Head of Global Forecasting, Moody’s AnalyticsFollow Mark Zandi on 'X' and BlueSky @MarkZandi, Cris deRitis on LinkedIn, and Marisa DiNatale on LinkedIn Questions or Comments, please email us at [e-mail]. We would love to hear from you.  To stay informed and follow the insights of Moody's Analytics economists, visit Economic View. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome to Inside Economics. I'm Mark Sandy, the chief economist of Moody's Analytics. I'm joined by two of my colleagues, my trusty co-host, Chris DeReedies. Hey, Chris. Hi, Mark. Good to see you. Good to see you as well. Marissa is off this week, so we're flying solo.

but not really because we got one of our colleagues aboard Adam Kamen's. Hey Adam. Hey, Mark. Adam runs our regional economic services. How many times you've been on the inside economics, Adam? I want to say it's about a half dozen now. Oh, you're, I did not realize. Okay. Clearly very forgettable, but not fair. Not low blow. Yeah, low blow. Hey, um, you guys, I made my way down to Florida. You can see I'm in a short sleeve shirt. here. How about that? Look at that. Yeah.

You're not braving the snow. 15 hour drive, my friend. And I did it all by myself. I couldn't, wouldn't have my wife drive. Yeah, 17. I could be a truck driver, no problem. I'm telling you. Straight shot.

Straight shot. Five stops. You need gas, you know, to get from Philly to Florida, you know. Did you stop south of the border? You mean at, oh, you mean at the south of the border. The North Carolina, South Carolina border, there's a tourist trap. Yeah. You know, I don't, is it still open, Chris?

Do you know? I don't know. Maybe it's closed in the wintertime. It didn't look like there's a lot of activity there. I haven't driven down in years, but that's what I remember. Yeah, no, I, I'm not sure how that's doing. I'm not sure if it's still open. So I'm sure somebody will tell us.

Yeah, no, I didn't, you know, when I drive that, that distance, I don't listen to podcasts. I don't, I barely talk. I'm like in the zone. I'm like just in a zone for 17 hours. The only thing that I do that I really enjoy when we stop, my wife buys a local newspaper and we read the local newspaper, which is really pretty cool, you know. You can read the paper from South Carolina, like, I don't know, where was it? I can't remember the name of the town. It was near Sumter, South Carolina, I get a newspaper and, you know, you.

You read it, and it's, you know, pretty cool to listen to what they have to, what they're focused on, you know, in South Carolina. Anyway, and we've got a guest, Natalie. Natalie Gottschner, how are you? I am doing great. Thanks for having me. Natalie is the executive director of the Kemp T. Gardner Policy Institute in the great state of Utah. Good to have you. Yeah, thank you. We call it the B-5 state, which symbolizes industry. So it's a good, a good state motto for an economic question. podcast. I did not know that. Really? You're the beehives? Beehive State. Really? Oh, interesting. Hey, I've always had a, I've always

wondered about what do you call your, what do you, Utahtians call themselves? Oh, that's a, that's a, you know, like, we'd say Pennsylvanians, you say New Yorkers. What do you, what are you like a U, is that fair? Do you say, we say Utahans, but here's the thing. How do you spell it? So U-T-A-H-N-S is how we spell it. T-A-H-N-S, but the rest of the world, including the AP Style Guide, spells at U-T-A-H-A-N-S. Oh, wow. Yeah, they put A-N-S at the back of Utahans, and we don't like it. And so our legislature actually passed a bill that says we formally recognize ourselves,

you know, as U-T-A-H-N-S, and so now the style guides are going to have to update. So keep an eye on that one. Well, okay, so can you pronounce both those for me? They're both Utahans. Yeah, they're both Utahans. Just one has NS at the end and the other one has ANS at the end. Right. Well, you're also the associate dean at the business school at the University of Utah, right?

So you're kind of double dipping here in your work life. Yeah. You know, I lead a public policy institute that specializes in the Utah economy. And we're located within the David Eccles School of Business. And I think they just wanted me to have some, you know, swathes. on campus. So they, they allow me to be an associate dean as well. Well, I have to say, Natalie asked me, first of all, Natalie, I go back a long way. I don't know how far back, but maybe I shouldn't say Natalie. We're talking decades. We're not talking years. We're talking

decades. In fact, I think Natalie, you may be the very first state government client, because you were at the state of Utah back in the day. And I think you might have been the very first state client that we ever had. Did you know that, Adam? Have I ever told you that? Because Adam runs our, he doesn't realize how important you really are to his job. You know that, Natalie? You are like key to his job. Yeah. Adam, this is regional financial associates, RFA. And we had an econometric services contract. And, you know, there were the big, big players. And then there was this new innovative group. And we signed on to the new innovative group that, of course, became what economy.com and Moody's analytics is today.

Yeah, so Natalie's right at the top of the family tree. And we have signed every year. It's been consecutive for decades, the state of Utah client. Knock on wood, knock on wood. And what was I going to say? Oh, you invited me out to speak to the Institute. You had a wonderful lunch. I guess it was the Economic Club of Salt Lake, I think.

Yeah, Economic Club of Utah. Of Utah? Yeah. It's been a nice day there. And that's the last time we were. That wasn't too long ago. I think you had your first snowfall the day I was there or something. It was really quite beautiful.

We need you to come back because we need some more snow. Really? You haven't gotten any snow? Not enough. Sorry to hear that. Yeah. Sorry to hear that. But Natalie, I wanted you to come on because we're going to talk about regional economics and what's going on regionally.

And, of course, Utah has always held up as a kind of an economic shining light, kind of through thick and thin, no matter what's going on. Utah economy is doing incredibly well. We want to talk about why and what the challenges are. I kind of sort of know why Utah is doing so well, because you're leading the way, Natalie. I mean, I think that's kind of sort of what's going on. But we'll talk about that in a little more detail. But why don't you tell us a little bit more about your history, how you got to where you are and about the Institute itself? Happy to do that, Mark.

I'm one of those that knew really early on. I wanted to study economics. So I basically go to college at the University of Utah, and I take every economics class I can find. And then after college found the perfect job for someone with my interests, I worked in what's like the OMB of state government. It would be the governor's office of planning and budget here in Utah. And just got a really broad feel for, you know, how the, what makes the Utah economy click. And here we are, I won't say four decades later, but almost four decades later. The Institute I lead, it's kind of a fun thing.

We have, you know, you always want to connect academia with what's going on, academia and action. And the Institute I lead sits right halfway between the University of Utah and the Capitol, or the University of Utah in downtown. And so we helped decision makers in this state make informed decisions, and we do the governor's economic report. Listeners can go to gardner.orgutta.edu and see the full breadth of things we do. Last year, in this current year, I guess I can just say in 2025, we published 100 reports. Now, some of those are facts.

On the nose, 100 reports? On the nose? Yeah. everything from maternal health issues to, you know, issues with travel and tourism, to our thoughts on the forecasts. So it's a pretty prolific group of Utah on, specializing in the Utah economy. You know, I kind of think of the Institute, because I learned a lot more about it when I was out there a couple, three months ago, kind of sort of like the Congressional Budget Office, kind of sort of, you know, you kind of take the different policy proposals that are kind of snaking their way through the last. legislative process and you evaluate them and you provide context and other information to allow lawmakers to get it right. Do I have that roughly right? And is there anyone else out there like you? I mean, I can't think of other states that have this kind of resource at their disposal.

Yeah. You know, I spent 16 years on Capitol Hill here in Utah. I worked for a few years in Washington as well. I would characterize our institute as a premier, you know, economic think tank for at least at the state level. And if you think about people in government service jobs, they're in the whitewater. There's politics going on. There's deadlines. It's really intense. You can only do it for so long. But at a think tank, you have the luxury of being able to do things in more depth at a little more deliberate pace. And so we end up being a bit of a, you know, we're in service to the people that are in the whitewater jobs, but we get to be in a university setting and do things with a little bit more thoughtfulness and time.

Anyone else out there at the state level like you that does the kind of work that you do? Well, you know, when we started the Institute, we really looked at what was going on at Brookings and AEI at the national level. At the state level, the SEPER, the group at Stanford, the Stanford, you know, Center for Economic Policy Research. We love what they do. have modeled some of what we do after them. Great. Well, good. Well, good to have you aboard. Before we dive into regional economics, though, today we got a key economic statistic. The government reopened and now releasing data.

And we got the third quarter real third quarter GDP report, finally. And, hey, Chris, have you had a chance to take a good look at that? And you have. Oh, you have? Okay, great. Good, good, because I haven't had a chance. You want to just give us a sense. of what the numbers look like? Sure, it was a bit of a shocker. 4.3% of real growth in the third quarter.

So this was a number that was supposed to come out on October 30th, originally. The first estimate and the second estimate in November, they kind of skipped that. So we got this 4.3 estimate. There'll be a final estimate that comes out later, but well above consensus expectations, so very strong growth and following strong growth in the second quarter as well. These expectations, what are you talking about? Consensus. Not my expectations.

I mean, we thought it was going to be, didn't we think it was going to be close to four? We had it up. We didn't have it at 4.3. We had it certainly higher than consents. So we were on the right side of consensus, but this was even above us, right? Because even the Atlanta Fed GDP tracker, which they, it wasn't that kind of sort of near four? I mean, I haven't looked recently. Maybe I'm wrong.

No? Okay. I think it was one there. I don't think it was this high. But you're saying it was above everyone's egg. You know, some people were on the high side, but this was higher than on the high side. This was higher than most, if not all expectations. Okay, got it.

Let's put it that way. Yeah, so very, very strong driven by consumption and trade. So the low imports in the third quarter helped to boost the component of trade. The weakness came from investment, actually. That was not that strong. And we had a little bit of a boost from government, right, to put it all together. But the investment, I think, was, I think that was residential, wasn't it probably in all likely. Residential was negative.

But even the fixed, fixed non-residential was positive, but weaker than it was in the second quarter, certainly. Right, right. Yeah. So all around, you know, kind of a good report here, although some questions about, right, durability. if we're just, some of this may just be the payback of early imports in the first part of the year, right? So we have to wait and see what the full story here is. Consumption was certainly strong for consumers, but, you know, this is not fully accounting for price increases. So we'll have to wait and see here, but certainly through the third quarter of this year,

the economy performed very well, more resiliently than I think many economists had had assumed going into the year in terms of GDP in terms of GDP right what do you think underlying GDP growth is I mean it goes up because it was down minus something or other in the first quarter it's been up the that Q2 Q3 were strong including this number from Q3 Q4 is going to be weak we know that from the because of the government shutdown but it was going to be weak anyway consumption seems to be flagging a little bit but some more script to be written there but net net net abstracting from the vagaries of the ups and downs and all arounds what do you see think underlying GDP growth is? Yeah, for 25, I think we'll be around 2.1 to 2.3 would be my guess.

I think it's for calendar year? For calendar year, that's right. So you think, you think underlying GDP growth is kind of just north of 2%. Yeah, I'd say it's right at potential. Yeah. Yeah, well, okay, but the, you know, despite that growth, there's no job growth, right, or very little, and unemployment is rising. So how do you square all that? Productivity. Is that what it is? It's all productivity growth. Mechanically, it has to be predictive, right? If you just do the, if you're getting extra growth with no job growth. Right. Yeah. The way I would have framed it, I would say underlying GDP growth, because if you take our Q4 forecast and look at year over your growth, Q4 to Q4, it's going to be something around two-ish percent. And I would say that's kind of

underlying growth. Because, you know, quarter to quarter is going up and down all around, trade tariffs, measurement issues, that kind of stuff. The potential rate of growth has to be higher than that, right? Because unemployment is rising. So it feels like potential growth is like two and a quarter, of which one in three quarters is productivity, half, a point is labor force growth, and that gets you to two in a quarter. And if that's the case, that kind of gets you to square the circle. Does that sound about right to you? The sounds about right. Yeah, I think we got, we have some, uh, some error bands around all of these numbers. Yeah, sure. Yeah. So. Right. I would love to hear Chris comment on the productivity.

Explain that. And I have a feeling you're going to get to AI in doing that, but. Yeah, what's behind the productivity gains? Take us deeper on that one. Yeah, you know, I'm reluctant to say it's AI. I think there's a little bit of AI here, but I'm still of the opinion it's too early in the cycle here to really get those AI types of gains. I think we're still benefiting perhaps from some of the post-pandemic productivity gains perhaps. Just, you know, business is being more dynamic and labor market being perhaps providing some better matches, some of that going on. I think there is some of the AI productivity that may be. seeping in here, but it's, I don't see it as the main driver at this point. I think I'll don't know. If the numbers I just gave are roughly right, one in three quarters percent of productivity growth, that's not too much different than what we've been getting, you know, before this year, right? I don't know that it's hard to argue AI was playing any kind of a role before 2025, I think, in terms of productivity growth. So it feels like, it doesn't feel like

AI's kicked in to any significant degree. On the, on the supply side of the economy, on the demand side of the economy, for sure, that investment spending that Chris talked about, that's AI. And also the wealth effects through the run-up in equity prices, AI stock prices. That, that's demand side. But on the supply side, it doesn't feel like it's played much a role just yet. I don't know, Chris, it sounds like you agree with that. Yeah, I'd agree with that. Natalie, do you, do, does that? Yeah, I'd like your distinction there. I do like your distinction there. I've been really interested in the layoffs that are occurring in consulting companies. And some of these layoffs feel AI related to me.

Well, which consulting firms are you speaking? I'm, I'm thinking of the standard, you know, the standard big eyes. Yeah. Yeah. They've had definitely a softening of hiring and we're seeing it in a business school sense. And so I bring it up for that reason. And I think that, you know, some of the business intelligence that they used to provide is now formulaic and easy through AI as opposed to their, you know, I guess they're human resources. Yeah, my sense is it's kind of still early days. I mean, I'm sure it's having some impact, but it's not adding tens of a percentage point to productivity growth. It's still very small, But that means it is having impacts on certain industries.

I would expect the consultants to be on the leading edge of all that, for sure. Yeah. Hey, Adam, you heard all that. Any comments? I know you follow this data carefully as well. Any views? You know, I think that generally I've been thinking about it as well. I mean, clearly it's the divergence between what's happening in the labor market and what GDP and output are telling us.

us seems to just be growing wider and wider, which clearly that's a productivity story. I wonder in the context of the case-shaped economy that we've been talking about a lot of that, right, that this can, if that gap keeps widening, which it seems like it is, if that is maybe even more of a red flag, that more of the gains are accruing to higher earners. I, I don't, I'm confused by the confusion around productivity and jobs. The numbers kind of work, don't they? I mean, if I tell you that productivity growth is, you know, between one, it's like one and three quarters percent, in labor force growth is about a half a point. Isn't that consistent with kind of no job growth when you have a kind of weak, relatively weak demand? I mean,

the demand is weaker than supply, because that's the unemployment rate going up. Therefore, you would, you would expect those numbers kind of add up to no job growth. But that doesn't indicate any significant acceleration in productivity growth. One in three quarters percent is kind of, maybe it's on the high side of where we've been. I don't know. Maybe it's on the margin. No? No.

Yeah, I mean, I guess it's more of the context of this current report, right? Where I think maybe some of those things are going to arise. I think of the overall trend, I would, I think that's generally, right? Okay. Add on to Adams. We did see a pretty significant rise in. corporate profits in the third quarter. Now, they can jump around a bit, but that would certainly support Adam's view of, you know,

who's getting the gains. It seems to be going more to the corporations versus labor. Right. Right. Right. Okay. Okay. And I know we got another data point today from the conference board on consumer confidence.

I didn't look at that at all. What did that say, Adam? It wasn't great. So, I mean, the good news is that November was. revised higher. I would say the good news ends about there. So December declined in September, again, the overall kind of top line consumer confidence index. So that's the fifth straight monthly decline. These are relatively subtle declines each month. So I think your rule of thumb mark. You can tell me if I've got this wrong. Isn't it 20 points over three months is a recession?

So we're not there. I mean, these are relatively small declines, but it's clearly trending consistently lower. And there were some numbers kind of under the hood that were a little bit worrisome. So the measure of how consumers are assessing job availability, basically if you take the share that say the jobs are plentiful, subtract the share that say the jobs are hard to find, that gap is narrowing significantly. I believe it's now the narrowest. It's been, I think it's in now four or five years, something along those lines. And similarly, there's a measure of what consumers think of their family's financial situation where that measure has also gone negative now for the first time since, I believe it's 2021. So a lot of these numbers are tilting more

and more negative. Expectations are generally holding steady, but they're holding steady at a at a level that's below historical average, generally at a level that's, you know, around the threshold where we would think that a recession at least is, you know, potentially in the So none of the numbers look particularly promising. Yeah, so that rule of thumb is if the conference board survey of consumer confidence falls by more than 20 points over a three-month period, it always has preceded an economic downturn. The intuition being consumers are losing faith. They start to pull back.

The lack of spending causes layoffs. Layoffs cause more of a pullback. And you can do this kind of self-reinforcing cycle. And we got pretty close to that, but I haven't quite gotten there yet. And you're saying even with these small declines, it's not big enough to trigger that rule of thumb. It's not. I mean, it looks like over three months, we're down eight, nine, ten points, not quite 20. So the direction of travel is not the one we want to be taking, but it's not a sharp enough decline to be overly worried yet.

Hey, Natalie, in Utah, do you have a measure of consumer confidence you look at to get a sense of you talk? We have a Zion's bank sponsors a consumer sentiment survey. We model the Michigan survey, asks the same questions, but at a local level. And, you know, the general rule of thumb is that our sentiment is typically higher than the nation, but follows the same peaks and troughs. Although right now I am seeing a little bit of a growing gap. But many of the data gurus, you know, who listen to the podcast, will know that Michigan changed their methodology not too long ago.

And we're still trying to put our finger on. Is it real or not? But an observation I'd make, Mark, and you wrote about it recently, but there's politics in these numbers, right? You know, in sentiment right now, I think there is a feeling of if you like the policies of the current administration that you feel one way, and if you don't, you feel another. And I just think that gets into these numbers, and it always has, but I think it's getting in more and more. will become more polarized and as people may have stronger and stronger feelings. And, you know, it's not to knock because that's still real. If your politics make you feel a certain way, it's still a sentiment.

Yeah, yeah, for sure. The only thing I, you're absolutely, Michigan has changed its survey methodology, and I think that has lowered the kind of the level of sentiment. I think they went from kind of phone to online interviews, and that had an impact. And no doubt, the politics of the respondents is key, because if you look at, you know, if you go back when Biden was president, Republicans were very depressed, and now Trump is president, the Democrats are very depressed and big swings in both. But I think no matter how you cut the data, just go look at the independence.

You know, it's down. Maybe not down, down, down, like the current data say, but people are feeling pretty bad. But you're saying in Utah, directionally, it's the same, but not nearly to the same degree. People are feeling less confident, but not nearly as much as they are nationwide, which I guess makes sense. We still haven't got to a level of sentiment that we had pre-pandemic after all these years. Oh, yeah. Oh, so it's still above pre-pandemic levels in Utah. No, no, it dropped with the...

dropped. Oh, I still has not recovered. Yeah. And I think that's just a general funk that people find themselves in. But, you know, I think this this case-shaped economy is very real. I do think that this economy has been rewarding high-income individuals and the like. And I think this affordability, you know, word, whatever we want to do about it, is percolating through the economy and through the public messaging that people are hearing.

And so we've got our handsful as economists to unpack all of that. Yeah. And I say, too, one thing that is interesting in the data, going back to the point about political affiliation, I think everything you said is right. Everybody's kind of feeling these dynamics. All three, Democrats, Republicans, and independents.

Sentiment is declining among all three. So absolutely, there's these shifts that happen every four years or so. change the level on a year-over-year basis, but across the board, people are getting less confident. Yeah, I may have this wrong. Natalie, to your point about the case-shaped economy, you can also break down the sentiment surveys by income group, and you don't see this dichotomy that you would expect, meaning that low-income folks would have much weaker confidence than the high-income folks. You just don't see it. And again, it might be just measurement and the income breaks and everything else.

But we've been perplexed by that, why we haven't seen that show up in the confidence. Yeah, that is interesting. Yeah. It's interesting. Anything else on the GDP or the confidence numbers? You want to bring up, Adam, before we move on? You know, I'll throw one other thing out there,

which might be a good segue into a regional discussion. Yeah, far away. The conference board reports sentiment by, for a handful of states, but they also have it by census division. So this would be like the, you know, the mid-Atlantic. I guess which is the most optimistic. I haven't looked at the data. Okay, go ahead.

Is that what you're going to tell us? Where the confidence is most, is highest and where it's lowest? I'll tell it the opposite, but... Where it's lowest. Where it's lowest. I think you'll be surprised by that one. Okay, let's play the game. Chris, what do you think is the lowest confidence?

You might know the, if you haven't looked at the number. I haven't looked. I'll go with the northeast, though. Northeast, yeah. I think it's lowest. What about you, Natalie? I was going to go to the coast for the lowest, so. be northeast or the Pacific? Well, wouldn't it be around Washington, then wouldn't that be kind of in the South Atlantic?

But that also includes Florida. So Florida and the Carolines would be strong. I go with the group. I'd say either Mid-Atlantic or New England. No, it was a, well, it wasn't initially a question, but it was kind of a trick question here. Okay. Where it's strongest, I actually won't surprise you, where it's weakest will. strongest is the west-south central that's dominated by Texas right so that's what we often call

the oil patch but um no surprise there that's been one of the fastest growing economies for for years if not decades and generally things are humming along there the weakest actually in this month this is not you know month after mother thing but in this particular month it's the mountain west really but but adam what i would say there is you know starting from a higher like, you know, base or something, just because we have a softening going on for sure. And we're used to it being stronger. I mean, you know, Utah right now is growing at about our job growth will end up in 2025 at about 1.4%.

And that's well below our historical average. Yeah. Your point's very well taken. Yeah, but like twice everyone else, yeah. Twice everyone else. So, is that, so Adam, is that right? So in the mountain west, is it, is the level of confidence? actually the lowest in the country in the Mountain West?

It is the level. I mean, keep in mind that, yeah, this is an index, right? So I think to Natalie's point, yeah. Yeah, it may, you know, going back to I think they indexed to the mid-80s. So, but regardless, it absolute terms, maybe not. But yes, in terms of this index, it is the lowest. It's not the change year over year. It's actually just the index reading is the lowest in the Mountain West for December.

Is that a big change in that month or is that, has it been? It's unusual. these they vary months to month a month to month so this is not a long term trend by any means you're not cherry picking are you are you cherry picking in the tradition of

economic cherry picking maybe a little bit maybe I'm like picking the seed of the cherry I'm not saying this is a long term trend but there are some signs of weakness in the mountain west and some concerns about the mountain west that I think are out there and may be

reflected here well let me let's talk about regional economics. And maybe I want to, if I can frame it this way. So I did this exercise with your help, Adam, where I played the National Bureau of Economic Research for state economies. You know, the NBR, Dating Business Cycle Dating Committee, group of august economists, academic economists, they look at a plethora of data, mostly coincident economic indicators, jobs being probably the number one indicator. And then they make an assessment based on judgment. whether the economy, the national economy is in recession or not and when, and they define a recession,

I'm paraphrasing, so it's not exactly right, but broadly speaking, a broad base, so across lots of regions and industries, a persistent decline in economic activity, whatever, you know, they define that on the fly. And I did the same kind of thing for state economies. I mixed it up a little bit because each state has its own kind of industrial mix and, you know, in the case, of Utah, not, excuse me, Las Nevada, I looked at tourism, travel, that kind of thing, because it's tourist base. For New York, I looked at kind of financial services, data, that kind of stuff. I can't remember, I don't think I looked at it for anything for Utah, but that was independent of the other data. And I found that based on this analysis, and now it's a little

old because the last data point is September, with the government shutdown, we don't have any more recent data. We'll have to update it. That about a state product, gross state product equal to about a third of the nation's GDP, were in or pretty close to recession. A third were growing, but below potential. That would include California, New York. And about a third were still an expansion mode. And Utah was in that, in that category. What do you think? You saw the analysis. what do you think of the result? And is that consistent when you're thinking now about what's going on regionally?

Or do you think, are you viewing things differently than that? Generally, I think that we're on the same page, I think, in terms of kind of the magnitude and where recessions are occurring and where the risk is most pronounced. So I don't think that is fundamentally changed. I do think there have been some shifts. Again, we don't have that much data, So we're looking at, you know, a combination of private sources, like that Revelyo has a state-level measure, for example.

So looking a little bit at that and look at the updated payroll numbers. Pretty clearly, it's, you know, D.C., Virginia, where it's unambiguous that they are in recession. Then it gets a little bit more subjective. I think some of the economies that I'm a little bit maybe more concerned about now than maybe we were a month or two ago, it would be. be Florida, actually. It looks like it's slowing pretty significantly. The moment we've got, I believe Iowa was originally in recession, but I mean, the numbers have really kind of fallen off there as well, and that does represent, I think, more weakness in the farm belt. So those are some of the areas. The coastal states, you know, the New Yorks, the Californians that I know you've

talked about, if those go, we're really in trouble. Those are still holding up okay. So I think that that's still valid, but that's, but I agree also that, you know, Utah, the mountain west, still performing well, to Natalie's point, clearly slowing, but slowing to where Utah is. I mean, I think most coastal states would sign up for that in a heartbeat. Yeah. Hey, so Natalie, so Utah is this kind of bright, shining example of good, consistent good economic performance in terms of, you know, pick your measure, jobs, gross, product, income, you know, whatever it is. It feels like it's kind of always in the top few states in terms of growth and performance. Is that roughly right? Do I have that right?

Is that your view too? I mean, when you look at all, because you look at the state, I'm much more carefully than I do. It's a really easy explanation, and that is that we signed up for your services so many years ago. I'll take it. Yeah, I'll take it. Yeah. You know, that's typically the case for sure. Here's a couple of things for people to think about. We, you know, the mountain states, we're in the center of the mount states, right in the middle. And it's always one of the most rapidly growing regions in the country. Utah has what we call a demographic cushion. That is to say, our rapid birth rate, our high fertility rate. And then a strong economy brings in a lot of people. have surging demand that just comes from our demographics. And I would just also add, we're very young. We have the youngest median age in the country. And so because we're young, we're tech savvy,

we're inexpensive, both for health care reasons, and then, you know, just 10 year on the job. And then you can ask me some more questions, but the other thing I would point to is Utah's economy is surprisingly diverse. I wonder, Adam, if you've seen this in some of your work. But Because we're a regional center, there's not a lot around us. We have to be a center for warehousing and distribution, a center for education, a center for help. We're, you know, halfway between the continental divide and the Pacific Ocean, halfway between the Canadian border and the Mexico border. And so we end up being a place where things happen, and it gives us, and then we're an energy state. You know, we have natural resources.

Not every state can claim that. And so when you take our, you know, combination of locational advantages and then put in a tech sector and an energy sector, you know, five national parks that bring in tourism, a great ski industry, an international state hosting the Olympics in 2002 and the international choice for the 2034 winter games, those are a lot of, you know, dynamics happening that make for a very dynamic place. and it shows up in the data. Yeah, I guess you started with the demographics. I mean, I think that's kind of key, isn't it? I mean, if you look into New England, it's kind of the opposite of that, right? The demographics are poor, birth rates are low, population is older, there's out migration, and that economy is always, even in the best of times, kind of right on the edge of going into a recession down there.

I contrast that to a state of Utah that's had 33 of 35 years of net in migration, more people coming in than leaving. Right. Now, part of the fertility rate, is that due to the Mormon population? Would you ascribe that to that or not? Yeah, yeah, I would. I mean, this is state, when you survey, it's about 42% of our state identify as members of the Church of Jesus Christ, of LADDSA, say LDS locally. So, and it's a very, you know, pro-family faith that, you know, encourages, you know, married couple families and children.

So I think that's there. I would also say, Mark, I want to be more, you know, when you've had 33 or 35 years of net in migration, it's a state that's changing fast. Our fertility rate has gotten much lower than it used to be. And so we have, you know, people from all around the world and country that are now living here, which has made us much more religiously diverse. And so you have a very vibrant Jewish population and Catholic population, Protestant populations, and others. So it's a, if I had to pick a word, I would say growth and I would say dynamism. And you get a lot of, I do, when I visited, it was the day before the U.S. the university, I learned this when I was there.

University of Utah is playing Brigham Young University. And apparently this is like, like Eagles versus Dallas Cowboys kind of stuff, you know, pretty serious stuff. You take your football seriously, but talk about a young population. Also, you get a lot of in-migration. Now, in-migration generally is driven by opportunity, economic opportunity, and it kind of becomes self-reinforcing. so it's hard to know where is the beginning and the end of all this is kind of, you know, feeds on itself. But what fundamentally, is it cost? Is it the fact that, you know, if I'm living in California and trying to become a homeowner, that's pretty tough because the median price.

I don't know what the median price is, but it's probably 750K, 800K. And then I look at the meat. What's the median price, Natalie, in Salt Lake? Well, in Utah, it's going to be, you know, almost $550,000. Is it going to be that high? Oh, wow. Now really, we've gotten a lot more expensive in housing. Interesting. Okay. But I was going to take it in terms of living costs, business costs.

Utah has always been attractive compared to California and the Pacific Northwest to a significant to Oregon and Washington. So that attracts, and that's where you get the in migration coming in to the state. Right. Yeah. I mean, I do think that. that our cost structures are changing here, and we're becoming less affordable. But it's certainly been part of the fundamentals of our past, that this was a good place to do business for cost reasons.

Increasingly, I think it's the quality of what you're getting here. So you think about how close we are to Silicon Slopes, and this is a natural place to grow out, you know, some of the things that happen in Silicon Valley. Sorry, I said Silicon Slopes. That's what we call our Silicon Valley. We're close to Silicon Valley. And it makes an attractive place to grow out here. Mark, I think when you're here, I showed you the data. Lumina has Utah the third most well-trained, well-educated workforce in the country. So this is the percent of the adult population with a certificate, a degree, you know, in a high-value area, some sort of certification. Only Massachusetts and Colorado are above us. by that measure. Which states are above you? Colorado and Massachusetts. In Colorado, yeah.

So percent of the adult population with a degree certificate and the like. So the workforce is attractive. The outdoor experiences are really attractive. It's a beautiful place. And then you have that demographic cushion. And I think that the underlying diversity keeps us performing well, even during hard times. I can attest to the cost of housing. So I may have told this story before, but during the teeth of the pandemic, I had this bright idea that, oh, this would be a good

time to buy a second home in Utah. Because, you know, this is obvious to you, but for someone from the northeast of where I grew up, I didn't realize how beautiful Utah was, and particularly the kind of the park city area, how just unbelievably gorgeous it was. And of First time I saw it, and it's so easy to get to, right? Because you fly into Salt Lake, and 45 minutes later, you're in this whole of the world and around Park City. So I got on a plane with my son, and we go out to Salt Lake City. Again, in the middle of the pandemic, I get there. There must have been 100,000 Californians there ahead of me.

It was like, and of course, they had driven up the price of everything. And still, to this day, I still get listings. and it's just impossible. It's just not there. Yeah, that's fair. But Mark, on to that point, it's the holidays. I'm a skier, and, you know, I can pick between seven or eight resorts, ski resorts, depending on my mood, which one I go to on which days.

And they're all, if you don't have traffic, they're 20 minutes to a half hour away. If you have traffic, it bumps up from there. But that's unbelievable accessibility to some of the greatest, you know, snow on earth. So it's a cool place. I'm going to come back to the challenges in just a second. But before I do that, let me turn it back to Chris and Adam. Hey, anything else you want to bring up in terms? How would you explain Utah's outsized performance, you know,

consistent outside performance? Adam, do you have any? Yeah, no, I mean, I think largely the factors we talked about. I think the youth of the population that Natalie mentioned, I mean, I think there's, you can't overstate how important that is and just how much of an advantage that is. So actually, I pulled some data on the median age by state. The gap between Utah and number two,

which I believe was maybe South Dakota or Texas, that gap is wider than the gap between number two and number 25 in terms of median age. It is far younger than any other state in the country. And so it's got a young, dynamic, relatively inexpensive workforce. And I think that that's a huge, advantage. And I think the affordability piece, that's been a big part of the story in the Mountain West, that it's been more affordable than the West Coast. I do see Utah following a little

bit of the Colorado path. And I think Natalie, your comments kind of almost imply that that's where it's heading, right, where it's more and more about workforce quality, quality of life and less about affordability because house prices and other costs have been driven so much higher. But to me, it all starts with demographics. Chris, anything? I like to say demographics is destiny. Yeah. Chris, anything on the, on that? Yeah, I'd agree with that. I guess maybe this is where you're going, but, you know, that's great on the positive side, but then there's infrastructure, there's water, there's other challenges. So I'd love to hear, you know, a little bit about that, but leave it up to you more. Natalie, no more Chamber of Commerce.

That's, we're done. You sold me a long time ago. So, you know, so also, you know, what are the challenges? Those peaks are 11,000 feet high. Yeah. Yeah. It also, can other states learn from Utah? I mean, because, I mean, a birth rate's pretty tough to change, isn't it?

I mean, yeah. I think, I mean, I think it's hard to do birth rate by public policy for sure. That's right. I'll tell you some of states can learn from Utah. we have the highest levels of social cohesion or social capital of any state in the country. And, Adam, that same gap you see on median age, you'd see on social capital, whether it's the Joint Economic Committee and their Social Capital Project or, you know, other measures. So this is a state that still, you know, prevents problems, solves problems,

uses networks of trust to do big things. And, you know, I can think of several examples of that, But that's part of the secret of this state is that it's still a place where things function. Case in point. We balance our budget every year. Of course, that's required by statute. It's also required by Constitution. We have a line item veto.

That's a big deal for fiscal responsibility for our governor. We have a AAA bond rating from all of the major rating agencies. Including Moody's. Yeah, including. And then we also have a spending or an appropriation limitation on the books. So we don't allow state spending to grow faster than the growth in population and inflation. Anyway, when you start to take some of those things, I think our fiscal practices are without peer among the 50 states. And I think all of our states and our federal government has none of those things, by the way.

No line item veto, no AAA bond rating, no balanced budget. We have a bond limitation as well, you know, that we limit our bonding to a certain percent of our assessed valuation. So that is something that I think businesses respect here and that they know it's a very well-run state. Right, right. I was going to say something. Hold on one second. Oh, social contingent. That reminds me.

There's another group called the Utah Foundation. Isn't it called the Utah Foundation? And I saw this when I was visiting. they do a social cohesion index, as I recall. Do I have that right? Yeah, that's right. You can go to UtahFoundation.org and see that. They're measuring social capital for all 50 states, and they'll see that same gap, as I mentioned. Yeah. I think I sent that to you, Adam, right? That social cohesion index. Yeah, it's pretty cool. Pretty cool. All right, so what are the challenges? I mean, when I was there visiting, the one thing that

people were talking about was the cost of electricity, and that now does seem to be a problem everywhere across the country data centers are scarfing up a lot of electricity and it's driving up price. Is that a challenge? Yeah. Yeah. I mean, I think the top of the list is housing affordability and homelessness. Forability.

Yeah. I would reference traffic congestion just because it's hard to keep up with growth. We have two, I'm really concerned about third grade reading proficiency in our state. That's where we're putting our social capital to work because we've got. a governor and business leaders who are like, oh, well, then what are the remedies? Because we don't think our reading proficiency is what it needs to be. You'll hear people locally talk about water and particularly Great Salt Lake. Yeah, so Great Salt Lake is both, and it has a lot of lakeside industry, so it's an economic issue, but it's also a human health issue because

as the elevation drops in this lake, it creates more dust that can get blown up in the wind and impair our air quality. So I'm not all Chamber of Commerce, Mark. And then most important, not most importantly, but also important about the lake is it's, it is a ecological master class for, you know, for bird migration. And they stop here and eat before they head further south. And so you have to have a, we have to have a healthy lake. And that's something we're paying a lot of attention to. Right, right. Hey, Adam, anything, any challenges that you've, you've for Utah that you want to call out? I think those are the most significant.

I mean, obviously there's a large, I mean, maybe one other. I think those are the most important. One that I think maybe I'd rank lower on the list, but important as well is it's very, right, very tech heavy, very kind of young person, heavy. And when we talk about AI and the jobs that we're worried about AI coming for, right, it's those entry-level sorts of jobs that maybe Utah's a little bit more

vulnerable there. So that would worry me a little bit about kind of the long-term reliance on kind of a young tech workforce. Natalie, you sense that at all? That's right? Yeah, I do. But I think assisting is I mentioned that we have a diverse economy. It was the advent of tech in the local economy that started to make us diverse because we were very much a goods-producing economy in the early 80s. You know, we were mining, manufacturing, construction as a growth state. But We competed very well in the, you know, in the information age, if you will. Some of the listeners will remember Word Perfect. It's really the first word processor that, you know, went global, and it was founded here in Utah.

Yeah, yeah. Yeah, Word Perfect was a Utah company. And anyway, as as the tech sector grew, we actually diversified. But now it got so big that I worry that we started to specialize to Adam's point. And so that's something that we keep an eye on. Right now, I think our measure shows that we have the seventh to eighth most diverse economy in the country. That would surprise people. But the measure there is an index of similarity to the U.S. economy.

And if you're similar to the U.S., we say you're diverse. Oh, I would have to, again, Missouri always does well on it, I know. Oh, interesting. I think we have our own index, don't we have? We have our own, which has measured the same way. I'm actually looking right now to see if I can figure out, which, uh, all right, let's, let's guess. I'm going to, I'm going to, who's the most diverse state by that measure? I'm going to go Missouri, Georgia, Arizona, Illinois. That's my list.

Whoa, that's pretty, pretty ambitious. Chris, who do you think? I was going to throw Texas in the mix, but, uh, not Pennsylvania? I think, I think Pennsylvania is pretty high on the list. I have Pennsylvania high in North Carolina as well. North Carolina, too, yeah. Adam, do we have any of those right? You know in a second. It's not taking forever to load.

If those aren't right, I want you to start using our index. I'm going with Pennsylvania just because it's my home state. No? Adam, someone's got to do a jig while you get this thing working. That's right. Anyway, well, anything I miss Natalie? Because I want to play the stats game before we call it a podcast. And anything else you want to call out that I didn't ask you about?

You know, maybe just... Suppose you were governor of the state of grand state of Pennsylvania. Based on your experience in Utah, what's the first thing you would do? I'm just asking. Now, frankly, the governor of which state? I pick a state, but I like Pennsylvania because we got our problems here. We need someone like you to come here and fix it. An economic thing, but the number one thing I would do is seek more dignity in public discourse.

I don't think we can solve our problems as long as we're, you know. What are you going to do, band TikTok and Twitter? What are you going to do? We're doing that. We have a governor that is leading the charge on youth use of social media. Yeah, he's good. I like him. Yeah, he's a good guy.

This is Governor Spencer Cox, but honestly, I don't think you can solve problems if you can't talk to each other and if you can't listen to each other. So I'm a big proponent of the Dignity Index. If you haven't seen that, this is the work of Tim Schrever and the University of Utah. We do a lot of work on it. Oh, that's right. You mentioned that. I tell Chris that all the time, you know. You know, he goes from the intellectual jugular, in my view. See how. Ouch. Wow. Right. Okay. Who's number one, Adam? All right. Natalie, you said Missouri, right? Was that you? Yeah. Yeah. Yep. Missouri. Oh, my God. I think I don't remember exactly what you were saying for the, do you want to, do you remember what you said for the top of honor? I did Missouri, Georgia, Arizona, Illinois. Okay. Illinois is number two. So you're, you're on top of it. Then North Carolina, Texas, New Jersey. So. But, yeah. P.A. Is not tough. A is, actually, OPA is seventh.

Okay, seventh. We're up there. It's kind of sort of where I thought it would be. All right, all right, guys. Let's play the game. The stats game, we each put forward a stat. The rest of the group tries to figure that out with clues, deductive reasoning, questions.

The best stats, one that's not so easy that we get it right away, one that's not so hard that we never get it. And if it's apropos to the topic at hand, and we covered a lot of ground here all the better, but not necessary. And, Adam, I'll go with you first. And Natalie kind of get her bearings here. Okay. So this is

38.7%. I might well, I'll let you. Is that in the conference board survey? Yes. I kind of went down to the balance about that. How do you do that? Whenever they say 30,

I'm not going to tell you my secret sauce. I'm just not going to tell you. Because we're going to be playing this game 10 years from now. But the real question, 38.7. So is it responses to one of the questions in the survey? Yes. Right.

So the question is which one? It can't be like present conditions, can it? No. No, it's more specific than that. More specific. Okay. Like a major purchase. It's like what percent of people think it's.

That sort of thing, major purchase sort of thing. Yeah. Buy a car, 38.7? No. No. Buy an appliance? It's not that. All of those are in that ballpark, too.

but this is Natalie, you want to ask a question? Doesn't have something to do with food? Food? It doesn't.

One little hint. Think more services as opposed to goods. Are you going to take a trip in the next 12 months? Yes. There you go. 38.

So is that higher or low? What is that? That is very low. That is the lowest it has been at any point. So the survey is more than 45 years old. Every other time it's been

this lower, lower, we've been in a recession or in the immediate aftermath of a recession. So this is very, very low. It's actually a very sharp drop even from a month ago. I'm not sure that I'd read too much into the monthly swings, but it's clearly there, there's something going on with domestic travel. I think a lot of the talk around tourism and the concerns there around international travelers, right? Canadians in particular are not traveling as much. But this, to me, highlights that, and we've seen this in some of the data, too, from airports around domestic versus international travel, that we shouldn't sleep on a potentially significant decline in domestic travel as well over the next year. That's interesting.

Yeah, very interesting. That's a good stat. Very good one. Natalie, you want to go next? Oh, if you want me to, but I think you should give Adam a raise. That was good. That was a good one, yeah. Yeah.

Okay, I'm going to go with a negative number, a negative 0.3%. negative 0.3%. Is it related to Utah? Okay, go ahead. If I would have been smart, I would have picked something to do with Utah, but I didn't. This is how much do you want me to give away? No, no, no. So is it a growth rate then, negative 0.3%?

Is it a year-over-year percent change? Is it a job-related number? It is. It is. You're good, Mark. Is it in a certain state? or industry? Industry? No. Sector. Neither of those, but demographic, a certain demographic? Pardon me?

Firm size. Oh, is firm size. So this is, is this data from ADP? This is ADP. And this is small firms. Who did that? Who got small? That was me. That was me. Very good. Yeah. This is taking credit. You see? God. And the data, the data that I'm thinking of that, you know, you're looking at November, I think it is year over year, percent change. And large firms are 3.7 growth and medium are 0.7 and small are minus 0.3. Yeah, interesting. And I can't recall. How do they define small? Is that less than? One to 49 employees. Okay, one to 49. Yeah. Do you see that? I picked it because I'm sort of like, you know, this is, these are the people that I'm. I'm, that are calling me and saying, can I bring you your resume? And it's, it's a neighbor down the street that's lost their job. There's, there's a lot of small businesses that are letting

go. Right, right. And to what do you ascribe that to? I mean, what do you think's going on there? I mean, there's just a lack of investment and, you know, confidence, uncertainty. Right. And perfect. I mean, that's how your explanation. Well, we'd also say, I'd also say it's uncertainty related to policy. Yeah. Yeah, right. And, of course, the smaller businesses are unable to adjust as easily as the big guys to big changes in policy. So, and don't have that kind of financial resource.

But that's a good one. That's a really good one. Chris, one more. Let's do one more. We'll call it a podcast. What's yours? All right, 2.4%. Is it in a GDP report?

It is. I left it out purposefully. Is it the average of GDP and income, gross income? No. It's gross domestic income. It's gross income. It's gross income. Yes. It's gross. Real gross thing. GDP, yeah, gross domestic income. Yeah, gross domestic income. Natalie, see how this is done? You're a master class. He knows that. He knows that my go-to. I know. You know, if you've been doing this for four years. This is what I'm learning that you guys do it from your field and Mark already knows your field and those of us listening from afar don't exactly know your field and so we're not as, we don't have to. Well, I know his tell when he goes, when he goes, does this

with his nose. I know he's going to GBI. That's how I know. It goes like to see the GDI. It's GDI. You want to explain, Chris? Okay, so GDI is another measure of of total output. So the GDP measures total output by a spending category, right?

I mean sum up all the different categories of spending. The GDI does a similar thing, but looks at sources of income. So wages, profits, right? In theory, those two should be the same, but there are differences in terms of how timely the data is collected, what has to be imputed and estimated. So they don't always line up, certainly not in a specific order. So the fact that they're pretty wide apart this square makes me give some pause. I don't want to read too much into that 4.3%. Typically, we think an averaging of the two gives you the best measure or a more appropriate measure of what's going on in the economy. So still very strong, even if you average the two, but not quite that 4.3 percent level. Right. That's a good one. Okay. I think we're going to

call this a podcast. This is, we're recording this the Tuesday before Christmas. I, so therefore, you know, Merry Christmas. Happy holidays. Happy New Year, all that stuff. I hope you have a wonderful, I hope you get on the ski slope, Natalie. I hope you get some snow out there. And, uh, uh, Adam, I hope, I don't know what I hope for you, but, you know, you're on your own. Listening good, not bad. Yeah. All good. All good, my friend. Yeah, all good. Yeah, all good. Yeah, all good. And you, of course, Chris, you know, all the best to you and your family and enjoy Florida. Yeah, thanks. I will.

I will. So Natalie, thanks so much for coming on. Thanks for having me on as a guest. Appreciate all that you guys do and happy holidays. Yeah, anytime. Well, with that, dear listener, we're going to call it a podcast. Merry Christmas. Happy holidays.

I hope you have a good new year and we'll talk to you soon. Take care now. Thank you.