UNAFFORDABLE UTAH

Unaffordable Utah: How Would Utah Fare During A Possible 2020 Recession?

Aug 15, 2019, 11:00 PM | Updated: Aug 16, 2019, 6:02 am

SALT LAKE CITY, Utah – Wall Street bounced back a bit Thursday, finishing up 100 points after dropping 800 points Wednesday. It was the worst day of the year for the market. The drop triggered fears of a possible recession.

The financial collapse and bursting housing bubble a decade ago hit Utah hard. Now, after years of a booming economy, the big question is: When will it come to an end?

Stocks plunged Wednesday, reacting to a “yield curve inversion.” That’s a rare flip when investors can make more on a two-year U.S. Treasury note than the 10-year note. It’s a warning sign that has predicted every recession since the 1950s.

The last time it happened was 2007, right before the Great Recession.

“When you have an inverted yield curve you get a recession on average a year after this,” said Mark Knold, senior economist for the Utah Department of Workforce Service.

That’s not the only caution sign, Knold said. We are also at full employment.

“The merger of those two is around the summer or fall of 2020, so that’s why the recession fears are being talked about now,” he said.

So how would Utah fare in a recession? Knold said Utah has a lot of buffer room to absorb a setback.

“Even when the economy slides, often times, we don’t slide as far,” he said. “The nice thing about the Utah economy – it’s very diverse. Our employment is spread nice and diversely among all the industry sectors. I call that your ‘economic immune system.’”

Pulling out of the last recession, Utah’s booming economy and job growth outpaced the rest of the nation. But while we can have higher highs, we can also experience lower lows.

“Our lows can go one way or another depending on the recession,” Knold said. “The last one, the Great Recession, we actually went a little lower than the national setback.”

For many millennial workers, their only experience with an economic downturn was that lengthy and devastating Great Recession that officially lasted from December 2007 to June 2009.

“Even if we do have a recession it doesn’t necessarily mean that it’s going to be just like the last one,” said Zions Bank economist Joseph Mayans.

Mayans agreed that Utah is well positioned to weather a storm, but said we’re not an island.

“Even though the local economy can be very strong, we could have some side effects of some of those larger companies that are affected by global events,” said Mayans.

While no one can’t predict if a recession is really around the corner, Mayans said it’s still a good wake-up call – especially if you’re in debt, living paycheck to paycheck, or don’t have enough in savings to fall back on.

“It’s a good time to take stock of your household finances,” said Mayans.

Seven Ways To Recession Proof Your Finances

  • Start saving money.
  • Establish an emergency fund. Experts suggest three months of living expenses, at a minimum.
  • Cut expensive memberships and subscriptions.
  • Pay down debt. Start with the bills charging the highest interest rate.
  • Evaluate your car loan. Can you refinance for smaller monthly payments?
  • Examine how much home equity you have and if it could be used provide a cushion or to pay off higher-interest loans.
  • Avoid drastic changes when it comes to 401Ks and other investments.

“Don’t try to time these global, international, economic events. Really, the duration of time is your best friend,” said Mayans.

Finally, have a strategy for a job you could pivot to in case your industry faces layoffs.

“Where will my skillsets then go over to that other part of the economy that’s not having problems. That might still be hiring,” said Knold.

For example, there is safety in certain recession-proof jobs.

“Education and healthcare,” said Knold. “They don’t decline during recessions. Not in the state of Utah. We don’t stop educating our children; we don’t stop going to the doctor.”

A word of warning – economists point out that consumers are driving our economy right now, so if everyone were to cut back on spending all at once it could actually help bring on a recession.

KSL 5 TV Live

Top Stories

Unaffordable Utah

House under construction...
Ladd Egan

Utah bill seeks to help first-time homebuyers

A bill making its way through the Utah Legislature would create a first-time homebuyer assistance program.
1 month ago
FILE: A for sale sign is pictured in Salt Lake City on Thursday, July 15, 2021. (Kristin Murphy/Des...
Britt Johnson, KSLNewsRadio

Utah ranks 45th in the country for affordable housing

It’s no surprise that housing is expensive right now, but it’s that way everywhere, right? Wrong.
1 month ago
Follow @KSL5TVLike us on Facebook...
Ladd Egan

Unaffordable Utah: Shift your budget to combat inflation

After battling high inflation for nearly two years and a rollercoaster of gas prices, experts say it’s time for Utahns to make some budget shifts to survive the persistent higher prices.
1 month ago
Follow @KSL5TVLike us on Facebook...
Tamara Vaifanua

Tips to reduce your utility bills this winter

A lot of Utahns are shelling out more to keep their homes warm this winter -- about 17% more due to inflation.
2 months ago
Brenda White cookies...
Matt Gephardt

Gephardt Busts Inflation: Rent prices down nationwide but very high in Utah

All over the country, the cost of rent is finally starting to go down. But that is not the case here in Utah.
4 months ago
Follow @KSL5TVLike us on Facebook...
Ladd Egan

Unaffordable Utah: Keep the holiday magic alive without breaking the bank

From the Thanksgiving turkey to the presents under the tree, the holidays are expected to be more expensive this year.
5 months ago

Sponsored Articles

Stack of old laptops with dark background...
PC Laptops

Old Laptop Upgrades You Need to Try Before Throwing it Away

Get the most out of your investment. Try these old laptop upgrades before throwing it out to keep it running fast and efficient.
Happy diverse college or university students are having fun on their graduation day...
BYU MBA at the Marriott School of Business

How to Choose What MBA Program is Right for You: Take this Quiz Before You Apply!

Wondering what MBA program is right for you? Take this quiz before you apply to see if it will help you meet your goals.
Close up of an offset printing machine during production...
Les Olson IT

Top 7 Reasons to Add a Production Printer to Your Business

Learn about the different digital production printers and how they can help your company save time and money.
vintage photo of lighting showroom featuring chandeliers, lamps, wall lights and mirrors...
Lighting Design

History of Lighting Design | Over 25 Years of Providing Utah With the Latest Trends and Styles

Read about the history of Lighting Design, a family-owned and operated business that paved the way for the lighting industry in Utah.
Fiber Optical cables connected to an optic ports and Network cables connected to ethernet ports...
Brian Huston, CE and Anthony Perkins, BICSI

Why Every Business Needs a Structured Cabling System

A structured cabling system benefits businesses by giving you faster processing speeds and making your network more efficient and reliable.
notebook with password notes highlighted...
PC Laptops

How to Create Strong Passwords You Can Actually Remember

Learn how you can create strong passwords that are actually easy to remember! In a short time you can create new ones in seconds.
Unaffordable Utah: How Would Utah Fare During A Possible 2020 Recession?