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

County leaders broke ground Friday to transform two public housing buildings into modern affordable...
Jed Boal, KSL TV

Work begins on 300 affordable housing units for Salt Lake seniors

Salt Lake County made a big move Friday to preserve and improve nearly 300 affordable housing units for seniors.
1 month ago
...
Ladd Egan, KSL TV

Home valuations jump dramatically, but watchdog group says to expect modest increase in property taxes

Assessors across Utah are finishing up home valuations for upcoming property tax notices, and two counties are already reporting big increases in values.
2 months ago
Utah's hot housing market...
Ladd Egan, KSL TV

Utah housing expert predicts pullback in activity because of mortgage rates

An expert in Utah’s housing market expects that rising mortgage rates will cause a pullback in real estate activity and a slowdown in home price increases.
2 months ago
...
Lauren Steinbrecher, KSL TV

SLC neighborhood townhall raises questions over Affordable Housing Incentives proposal

Thursday night, concerns arose at a community townhall in a Salt Lake City neighborhood over an affordable housing incentives proposal, that some worry is deeply flawed.
2 months ago
...
Ladd Egan, KSL TV

Unaffordable Utah: Budget-friendly family summer fun

After two summers of pandemic restrictions, Utah families are itching to have some fun. If inflation, gas prices, and sky-high plane tickets are taxing your budget, don't worry! KSL has the solutions.
3 months ago
...
Ladd Egan, KSL TV

National home builder confidence drops to two-year low

For the fifth straight month, national home builder confidence fell, according to the National Association of Home Builders/Wells Fargo Housing Market Index.
3 months ago

Sponsored Articles

tips how to quit smoking...

7 Tips How to Quit Smoking | Quitting Smoking Might be One of the Hardest Things You Ever Do but Here’s Where You Can Start

Quitting smoking cigarettes can be incredibly difficult. Here are 7 tips how to quit smoking to help you on your quitting journey.
Photo: Storyblocks...
Blue Stakes of Utah 811

Blue Stakes of Utah 811: 5 Reasons To Call 811 Before You Dig When Working in Your Yard

Call before you dig. Even at home, you could end up with serious injuries or broken utilities just because you didn't call Blue Stakes of Utah 811.
Days of...
Days of '47 Rodeo

TRIVIA: How well do you know your rodeo? Take this quiz before you go to the Days of ’47!

The Utah Days of ’47 Rodeo presented by Zions Bank is a one-of-a-kind Gold Medal Rodeo being held July 20-23, 25 at 7:30 PM. The Days of ’47 Rodeo How well do you know your rodeo trivia? Take the quiz to test your know-all before heading out to the Days of ’47 Rodeo at the […]
cyber security through multi factor authentication setup...
Les Olson IT

How multi factor authentication setup helps companies stay safe

Multi factor authentication (MFA) setup is an important security measure that every company should implement for their workers. It’s also wise to install it for your personal and home accounts.
...
Lighting Design

Check out these stunning lamps with stained glass shades

Lamps with stained glass shades are statement pieces that are more than simply aesthetic. They also meet a functional requirement: to light up a room.
Address Bar of internet browser shows internet access...
AARP Utah

Utah voters 50+ support increased access to Internet

The AARP surveyed Utah voters aged 50 plus about internet access and if they support the expansion of broadband, especially in rural areas currently lacking it.
Unaffordable Utah: How Would Utah Fare During A Possible 2020 Recession?