Housing Market. Housing prices influence people’s choices about where to live and work, and Idaho excels in this area compared to other markets. While home prices continue to increase in Idaho, they are still affordable compared with home prices nationally.
A person who earns $60,000 a year in Boise would need to earn $106,000 in San Francisco or $141,000 in Manhattan in order to afford the same lifestyle. This is due, in large part, to the difference in housing, which is 252 percent more expensive in San Francisco and 408 percent more expensive in Manhattan. Idaho’s reasonable housing prices invite workers and businesses to relocate to the state, thereby boosting economic growth.
Home prices in Idaho are inching upward, rising 0.6 percent from July and 5.3 percent compared to August 2014. This rate of increase is expected to slow in the coming year where home prices are only forecasted to grow by 3.5 percent. Nationally, home prices followed a similar trajectory, increasing 1.2 percent from July and 6.9 percent compared to August 2014. National home prices are expected to increase by 4.3 percent over the coming year.
Labor Market. The unemployment rate in Idaho has ticked up slightly in recent months, to reach 4.2 percent. While this is still below the national unemployment rate—which fell from 5.3 percent in July to 5.1 percent in August—Idaho’s unemployment rate has been inching upward since April when it hit a post-recession low of 3.8 percent.
Nevertheless, the long-term trend in Idaho is still showing a good trajectory as much of the rise in unemployment reflects increases in the workforce participation rate. In August alone, the workforce in Idaho increased by about 400. Although this growth causes the unemployment rate to rise, it is a sign that workers are more optimistic about the economy as they begin looking for work again.
Many employers are bringing new business to Idaho and creating more jobs. For instance, Heartland Recreational Vehicles has announced it will open a new production plant in Treasure Valley. This facility is expected to eventually employ about 275 people.
U.S. Consumer Price Index. The national Consumer Price Index (CPI) released by the Bureau of Labor Statistics decreased 0.1 percent from July to August on a non-seasonally adjusted basis. The index has increased 0.2 percent over the past twelve months.
Gasoline prices declined sharply in August, which was the main driver of the decrease in the CPI. Other energy indexes showed mixed results: fuel oil decreased, and electricity and natural gas increased. The food index rose a notable 0.2 percent, with prices for eggs and vegetables seeing relatively-high increases.
To measure national price changes, economists often use the “core CPI” index—all items less food and energy. This core CPI increased by 0.1 percent in August, the same increase as in July. The core CPI shows actual growth or decline more accurately because it eliminates the volatility of energy and food indexes. Contributors to the core CPI growth include apparel, tobacco, and alcoholic beverages, which all saw price increases. Airline fares declined in August, along with indexes for recreation, used cars and trucks, and furnishings and operations.
U.S. Consumer Confidence Index. The U.S. Consumer Confidence Index (CCI) improved modestly in September following a larger increase in August. The Index rose 1.7 points to 103.0. Positive consumer perception of the current economic situation drove the majority of the increase.
The Present Situation Index, a measure of how consumers feel about current economic conditions, increased 5.3 points to 121.1 in September, reaching an eight-year high. Consumers who say business conditions are “good” increased from 23.7 percent in August to 28.0 percent in September, while consumers saying business conditions are “bad” fell from 17.8 to 16.7 percent over the same time period. Consumer perspective on job availability was slightly more polarized: consumers who stated that jobs are “plentiful” and those claiming jobs are “hard to get” increased almost 3 percent each.
Consumer optimism surrounding short-term outlook changed little, with the Expectations Index edging down to 91 from 91.6 in August. Consumers expecting an increase in availability of jobs held steady at 15 percent, while those expecting fewer jobs increased to 15.8 percent—a 1.3-percent increase. The percentage of consumers who anticipate a salary increase is 19.1, up from 16.2 percent in August.