The growing economy in Utah and surrounding states will continue to roll along through the middle of 1997 with no mention of recession, according to the chief economist of the Discount Corporation of New York.
"I am impressed with the economy in the Mountain States, and it should continue to be strong," said Allan R. Leslie, who is also managing director at Discount, a division of Zions First National Bank. He spoke at an invitation-only luncheon in the Joseph Smith Memorial Building. "There is little chance of recession before 1997," he said.Leslie pointed to the dynamic nature of the financial markets. "Anything you're doing has been dynamic." He also pointed to the unsettled psychology of the consumer. Even though the Federal Reserve Board boosted interest rates several times in 1994, consumers didn't believe that caused stringent credit conditions.
"If the Federal Reserve is so tight, then why did we have people still spending money?" he asked. He said consumer spending accounts for two-thirds of the economy, and if they keep spending the economy will continue "rolling along."
He said even though the Federal Reserve Board raised the rates for prime money lending, consumer confidence and payroll employment remain high.
Leslie said President Clinton promised to create 8 million jobs in his first term, and thus far the total is 6.5 million new jobs. However, because of weak unions and the service sector (and their relatively low pay) getting most of the new jobs, the situation is not inflationary.
He used an example of a highly educated man not being able to find work in his field, so he takes a job in the service sector. He adds to the list of low-paying service-sector jobs, which counts as one job just as if he were employed according to his education.
Leslie said the public's ability to afford a house dipped slightly in 1994 because interest rates rose and disposable income took a dip. "Consumers are still spending money, but it isn't on big-ticket items," he said.
The Mountain West, which includes Utah, Arizona, Idaho and Nevada, is the fastest-growing region for job creation, Leslie said, and Utah is the best in the nation at 6.2 percent. In the past seven years, Utah hasn't had a job creation increase lower than 3 percent.
Leslie said the in-migration to Utah is slowing down, which means the housing situation might slow down correspondingly. He said improved economies in California and Colorado will mean fewer people moving to Utah.
"If Utah can continue attracting business to the state like the Wal-Mart Distribution Center in Hurricane and Micron Technology in Lehi, the state's economy should continue to be good," he said.