Lessons from the Beehive State

[MUSIC] >> Welcome to Inside Economics. I'm Mark Sandi, the Chief Economist of Moody's Analytics. I'm joined by two of my colleagues, my trusty co-host, Chris Dredi. Say Chris. >> Hey, Mark. >> Good to see you. >> How are you? >> Good to see you as well. >> Merises off this week, so we're flying solo, but not really, because we got one of our colleagues aboard Adam Kamens. Hey, Adam. >> Hey, Mark. >> Adam runs our regional economic services. How many times you've been on Inside Economics, Adam? >> I want to say it's about a half dozen now. >> Oh, I did not realize, okay. >> Clearly, very forgettable, but not fair, not low blow. Yeah, low blow. Hey, you guys, I made my way down to Florida. You can see I'm in a short-sleeved shirt here. >> How about that? >> Look at that. >> I'm not braving the snow. >> It's an 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 to get from filly down Florida, you know. >> Just stops south of the border. >> You mean at, oh, you mean at the south of the border, right? The North Carolina, South Carolina border, there's a tourist trap, yeah. >> You know, I don't, is it still open, Chris? You know, I don't know, maybe it's closed in the winter time. 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'm not sure how that's doing. I'm not sure if it's still open. Some sure somebody will tell us. Yeah, no, I didn't, you know, when I drive 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, where were we, I can't remember the name of the town. It was something, or something, or South Carolina, get a newspaper and you read it and it's 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 Gotchner, how are you? >> I am doing great, thanks for having me. >> Natalie is the executive director of the Cam T. Gardner policy institute in the great state of Utah. Good to have you. >> Yeah, thank you. We call it the state, which symbolizes industry, so it's a good, a good state model for, for an economic podcast. >> I did not know that. Really? Or 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 talk, tie-ins, call themselves? >> No, that's a, that's a good one. >> Oh, like we'd say Pennsylvania's, you say, New Yorkers, what do you, are you like a youth? Is that fair, or do you say, I mean? >> Well, we say utons, but here's the thing. How do you spell it? >> So, U-T-A-H-N-S is how we spell it, U-T-A-H-N-S, but the rest of the world, including the AP style guides, well, is it U-T-U-T-A-H-A-N-S? >> U-T-L, wow. >> Yeah, they put A-N-S at the back of Utah's and it's, 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 of those for me? >> They're both U-Tons, okay, yeah, they're both U-Tons, just one as N-S at the N and the other one has A-N-S at the end. >> Right, well, you're also the associate dean at the business school at the University of Utah, right? You're kind of double-dipping here in your work, huh? >> Yeah, you know, I lead a public policy institute that specializes in the U-T-A-Konomy, and we're located within the David Eccles School of Business, and I think they just wanted me to have some, you know, swap on campus, so 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 are, I didn'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've, we have signed it every year. It's been consecutive for decades, the state of Utah client. >> Not gone wood, not gone wood, not gone wood, not gone wood, and what was I going to say? I was going to, oh, you invited me out to speak to the institute. You had a wonderful lunch. This, 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, that was just, 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 someone to know. >> Really? You haven't gotten any snow, okay? >> Not enough. >> Sorry to hear that, yeah, sorry to hear that, but, not only wanted you, 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 kind of an economic shining light, kind of through thick and thin, no matter what's going on, Utah economy does, 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're going to talk about that in a little bit 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 that I wanted to study economics, so I basically go to college at University of Utah, and I take every economics class I can find. And then after college, I found the perfect job for someone with my interest. 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 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 capital, 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 gardener.utah.edu and see the full breadth of things we do. In the last year, in this current year, I guess I can just say in 2025, we published 100 reports. Now, some of those are faculty. Under those 100 reports? Under those? Yes. Everything from maternal health issues to, you know, issues with travel and tourism, to our thoughts on forecasts. So it's a pretty prolific group of Utah 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 of three months ago. Kind of sort of like the congressional budget office, kind of sort of, you know, you kind of take with the different policy proposals that are kind of snaking their way through the 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, 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 white water. 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 white water 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? 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, at the seeper, the group at Stanford, the Stanford Center for Economic Policy Research. We'd love what they do of models to 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 that look, a good look at that and if you have, you have, okay, great, good, because I haven't had a chance. You want to just give us a sense of what, what the numbers look like? Sure. I 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. What are the expectations? What are you talking about? Consensus. Consensus. Not my expectations. I mean, we thought it was going to be cool. 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 higher than consensus. So we were on the right side of consensus, but this was even above us. Right. It's not. 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 around there. I don't think it was around there. 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. 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 to put it all together. And the investment, I think, was, I think that was residential, was it probably, you know, likely residential was negative. But even the 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 pay back of early imports in the first part of the year. Right. So we have to wait and see what the, what the full story here is. The 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 to, like, Q2, Q3 were, we're 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 were script to be written there. But net, net, net abstracting from the vagaries of the ups and downs and all arounds. 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. And 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. Right. Yeah. Well, okay. Despite that growth, there's no job growth, right, or very little. An 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 productivity, right? If you just do that. 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 year growth, Q4 to Q4, it's going to be something around 2, ish percent. And I would say that's kind of underlying growth, because quarter to quarter is going up and down and 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 and a quarter. And if that's the case, that kind of gets you to kind of square the circle. Does that sound about right to you? That sounds about right. Yeah. I think we have some error bands around all of these numbers here. Yeah, sure. Yeah. That's all right. Chris, comment on the productivity. Explain that. I have a feeling you're going to get to AI in doing that, but it was behind the productivity gains. I think it's steeper on that one. Yeah. 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 businesses 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 I don't see it as the main driver at this point. I think that I'm talking. The numbers I just gave are roughly right, 1 in 3/4% of productivity growth. That's not too much different than what we've been getting before this year. I don't know that the hard to argue AI was playing any kind of a role before 2025, I think in terms of productivity growth. Feels like it doesn't feel like AI's kicked in to any significant degree or 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 and equity prices, AI stock prices. That's demand side. But on the supply side, it doesn't feel like it's played much of a role just yet. I don't know. Chris, it sounds like you agree with that. Yeah, I agree with that. Right. Natalie, do you. 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. Are these layoffs? Feel AI related to me. Well, which consulting firms are used to be? I think. I think. You know, I'm thinking of the standard. Of 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 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've been. you've followed 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 the GDP and output are telling us seems to be growing wider and wider which clearly that's a productivity story. I wonder in the context of the K-shaped economy that we've been talking about a lot of that, 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'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 between one and three quarters percent, when labor force growth is about a half a point, isn't that consistent with no job growth when you have a relatively weak demand? I mean, demand is weaker than supply because that's the unemployment rate going up. Therefore, 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 maybe some of the high side of where we've been. I don't know. Maybe it's on the margin. No? No. Yeah. I guess it's more of the context of this current report, right? Where I think maybe some of those things could arise. I think it would kind of be overall trend, I think that's generally right. 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 Adams view of who's getting the gains, it seems to be going more to the corporations versus labor. 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, and the overall kind of top line consumer confidence index. So that's the fifth straight monthly decline. These aren't relatively subtle declines each month. So I think you rule of thumb, Mark, you can tell me if I've got this wrong, isn't it 20 points over three months? Yeah. Versage is a reflection. So we're not there. I mean, these are 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 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 got negative now for the first time since I believe it's 2021. Right. So a lot of these numbers are tilting more and more negative. Expectations are generally holding steady, but they're holding steady at a spot at a level that's below historical average, generally at a level that's around the threshold where we would think that a recession at least is potentially in the card. Well, none of the numbers look particularly promising. Yeah. So that rule of thumb is if the conference board survey of consumer competence falls by more than 20 points over a three month period, it always has proceeded in economic downturn. The intuition being consumers are losing faith. They start to pull back this like a spending causes layoffs layoffs cause more of a pullback and you get into 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 it's the direction of travel is not the one we want to be taking, but it's not as sharp enough to climb to be overly worried yet. Hey, Natalie, and you told, do you have a measure of consumer confidence you look at to get a sense of you tall? Yeah. We have a science bank sponsors, a consumer sentiment survey. We model the Michigan survey, ask the same questions, but at a low 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 podcasts 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. Become more polarized and as people have stronger and stronger feelings and, 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 is, 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 of these respondents is key because if you look at, you know, if you go back when Biden was president, Republicans were very depressed and now the 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 current, 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 we still haven't got to a level of sentiment that we had pre pandemic after all these years. Oh, yeah, so Sermon is still above pre pandemic levels in Utah. No, no. It dropped. It dropped. Oh, I see. It's not recovered. Yeah. And I think that's just a general funk that people find themselves in. But, you know, I think this, this K-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 is percolating through the economy and through the public messaging that people are hearing. And so we've got, we've got our hands full as economists to, you know, unpack all of that. Yeah. Let me say too. One thing I, that is interesting in the data going back to the point about political affiliation. I think you're, everything you said is right. Everybody's kind of feeling these dynamics. All three Democrats, Republicans and Independents, it's, sentiment is declining among all three. So, absolutely, there's these shifts that happen every four years or so. It might 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 K-shaped economy. You can also break down the sentiment surveys by income group. And you don't see the, this dichotomy that you would expect, meaning that low-income folks would have much weaker confidence in the high-income folks. You just don't see it. And again, it might be just measurement in 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? No, throw one other thing out there, which might be a good segue into a regional discussion. Yeah. So, 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, the mountain. I guess what is the most optimistic? I haven't looked at the data. Okay. God. Is that what you're going to tell us where the confidence is highest and where it's low and? Until at the opposite. Where it's lowest. Where it's lowest. I think it'll be surprised by that one. Okay. Let's play a game. Chris, what do you think is the lowest confidence? You might know the, if you haven't looked at them, 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, I'd be Northeast or the Pacific. Well, when it be around Washington, then wouldn't that be kind of in the South Atlantic? But that also includes Florida. So, Florida in the care lines would be strong. I go with the group, I'd say either Mid-Atlantic or New England. Well, it wasn't initially a question, but it was kind of a trick question here. Okay. Okay. Where it's strongest actually won't surprise, where it's weakest, well, strongest is the West South Central. That's dominated by Texas, right? So, that's what we often call the oil patch, but no surprise there. That's been one of the fastest growing economies 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? It's a trick, Paul. Yeah. 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 and about our job growth will end up in 2025 at about 1.4%. And that's well below our historical average. So. Yeah. You're probably very well taken. I know. Yeah. But like twice, everyone else, yeah. Twice, everyone else. So, Adam, is that right? So, in the Mountain West, is it the level of confidence actually the lowest in the country in the Mountain West? It is the level. Let me keep in mind that, yeah, this is an index, right? So, I think to add on these points is. Yeah. Yeah, it may, you know, going back. So, I think they indexed in the mid '80s, so, but regardless, it, in absolute terms, maybe not. But, yes, in terms of this index, it is the lowest. It's not, 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, is it, is it a big change? It's unusual. Yeah. They vary months to month to month. They vary months to month. So, this is not a long-term trend by any means. You're not cherry picking the law, are you? Are you cherry picking? Yeah. The tradition of a. I would say, I'm, you know, maybe a little bit, maybe I'm picking the seed of the cherry point. I'm not saying this is a, 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 maybe reflected here. Well, 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 Equal Dating Committee, a group of agust 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 Economies and Recession are 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, 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, excuse me, Las Nevada, I looked at tourism, travel, that kind of thing, because it's tourist-based. For New York, I looked at 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. Well, I have to update that, that about a state that had gross 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 in expansion mode, and Utah was in that category. What do you think, you saw the analysis, what do you think of the result? Is that consistently 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 combination of private sources, that Revello 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 DC, 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 would 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, the New York, the California is 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's still valid, but I agree also that 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 the heartbeat. Yeah. So Natalie, this Utah is this kind of bright, shining example of consistent, good economic performance in terms of, pick your measure, jobs, gross product, income, 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 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 were in the center of the mountain 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, and that is to say our rapid birth rate, our high fertility rate, and then a strong economy brings in a lot of people, but we have surging demand that just comes from our demographics. And I would just also add, we're very young, we're the youngest median age in the country, and so because we're young, we're tech savvy, we're inexpensive, both for healthcare 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 '02, and the international choice for the 2034 winter games, there's a lot of, you know, dynamics happening that make for a very dynamic place, and it shows up in the data. Yeah, I guess that you started with the demographics. I mean, I think that's kind of key, isn't it? I mean, if you're looking 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 the country. Yeah, trust 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 describe that to that or not? Yeah, I would. I mean, this is state, when you survey, it's about 42% of our state identified as members of the Church of Jesus Christ of Latter-day Saints, say LDS, 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 of 35 years of net in migration, it's a state that's changing fast. Our fertility rate has gotten a 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 youth, the universe, I learned this when I was there. If Utah was playing Brigham Young University, and I, apparently this is like, like Eagles versus Dallas Cowboys kind of stuff, you know, very, very serious stuff. You take your football seriously, but talk about a young population. Also, you get a lot of, in migration now, immigration generally is driven by opportunity, economic opportunity. 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 in that Lee and 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 end migration coming in. Right. Yeah. I think 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 of 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, over 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, you know, performing well, even during hard times. I can attest to the cost of housing, so I may have told the 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 from 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 the 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 world and go 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 at 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 impossible, it's just not there. Yeah, that's fair. But Mark, onto 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. Well, 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, you know, how would you explain Utah's outsized performance, you know, consistent outside performance? Adam, do you want to, do you have any questions? 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 at 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'd like to say demographics is destiny. Yeah. Chris, anything 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 what we've done. You sold me a long time ago. So, you know, also, you know, what are the challenges that those peaks are 11,000 feet high? Yeah. Yeah. Yeah. Yeah. And also, can other states learn from Utah because, I mean, a birth rate's pretty tough to change. Isn't it? Yeah. Yeah. I think, I mean, I think it's hard to do birth rate by public policy, for sure. That's right. I'm saying some of the states can learn from Utah. We have the highest levels of social cohesion or social capital in any state in the country. And Adam, that same gap you see on median age, you 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. Cleaning moodies. Yeah, I agree. There you go. 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 here, 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 balance 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 congegion. Can that remind me? Yeah. There's another group called the Utah Foundation, isn't it called the Utah Foundation? Right. And I saw this when I was visiting, they do a social cohesion index, as I recall. 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 stripping up price. Is that a challenge? Yeah. Yeah. I mean, I think top of the list is housing affordability and homelessness. We're building. Yeah. So 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, what are the remedies because we don't think our reading proficiency is what it needs to be. Well, here people locally talk about water and particularly great salt lake. Yeah. So great salt lake is both and it has a lot of lakeside industries. So it's an economic issue, but it's also a human health issue because as it, 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 importantly, but also important about the lake is it is a ecological masterclass 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 were paying a lot of attention to. Right. Right. Hey, Adam, anything any challenges that you identified for Utah that you want to call out? I think those are the most important ones. And then again, 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 importance as well is it's, it's very, 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, 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. 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 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, 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 and that one. Oh, I would have, again, Missouri always does well on it, I know, yeah. I think we could, we have our own index, don't we? We have our own, which is measured the same way. I'm actually looking right now to see if I can figure out which, uh, all right. All right. Let's, let's guess. All right. I'm just saying, I, I'm going to, who's the most diverse state by that measure, where I'm in Missouri, Georgia, Arizona, Illinois. That's my list. Whoa. That's pretty, pretty ambitious, uh, Chris, you, who do you think I was going to throw Texas in the mix, but, uh, we're not Pennsylvania. I think Pennsylvania is pretty high on the list. I have. I have Pennsylvania high and North Carolina as well. North Carolina too. Yeah. And Madam, do we have any of those right? You know, in a second, I'm taking forever to look. If those aren't right, I want you to start using our index. Oh, I'm going with Pennsylvania, just because it's my home state. You know, Adam, someone's got to do a jig while you get this thing worth it. Right. Anyway. Well, anything I miss Natalie, because I want to play this stats game before we call it a podcast. Uh, and, uh, anything else you want to call out that I didn't, um, I didn't ask you about. You know, maybe, but you're a governor of the state of Penn, state of Pennsylvania. What? Based on your experience in Utah, what, what's the first thing you would do? I'm just asking 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 pick an economic thing. But the number one thing I would do is seek more dignity in public discourse. Oh, I don't think we can solve our problems as long as we're, you know, what are you going to do? They had 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 good. Yeah, this is governor Spencer Cox, but, 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, of, of, uh, the dignity index. If you haven't seen that, this is the work of Tim Schreiber and University of Utah. We do a lot of work on it. Oh, that's right. You mentioned that. Chris said all the time, you know, you know, he goes, he goes from the intellectual jugular in my view. See, see how? Wow. All right. Okay. Who's number one? Adam. All right. Natalie, you said Missouri, right? Was that you? Yeah. Yep. Missouri. Oh, my God. I don't remember exactly, but you were, what you were saying for the, do you want to, do you remember what you said for the top five? 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, yeah. We're pretty gay. We're pretty gay. P.A. is not. Top. A is, uh, actually, oh, P.A. is seventh. Okay. Seven. Okay. We're okay. That's where I thought it'd 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. Stuck to 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. It's that propose to the topic at hand. And we covered a lot of ground here, uh, all the better, but not necessary. And, um, Adam, I'll go with you first and Natalie kind of get her bearings here. Okay. Um, so this is 38.7%. I might, well, I, I'll let you, uh, is that in the conference board survey? Yes. It's, it's my goodness. I kind of went down to the bell. I'll talk about that. How do you do that? Uh, whenever they say 30, I'm not going to tell you my secret sauce. I'm just not going to tell you because I'm, we're going to be playing this game 10 years from now. So, uh, but the real question, 38 points out. So is it, um, is it one of the responses to one of the questions in the survey? Yes. Right. So the question is which one, uh, it can't be like present conditions. Can it? No. No, it's, it's more specific than that specific. Okay. It's like what percent of people think that sort of thing, major purchase, sort of thing. Yeah. Buy a car, 38.7. No. No. Buy an appliance? No. It's not that all those are in that ballpark too, but this is, not only you want to take a, take a, ask a question, does it have something to do with food? Food. It doesn't. One little hint. Think more services is opposed to goods are going to take a trip in the next 12 months. That's, uh, yes. There you go. Yeah. Is that higher or lower? What is that? That is very low. Uh, that is the lowest it has been, uh, 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, this is very, very low. It's actually a very sharp drop, even from a month ago. Uh, I'm not sure that I'd read too much into the monthly swings, but it's clearly there. There is something going on with domestic travel. I think a lot of the talk around tourism and, uh, it concerns there around international travelers, right? Canadians in particular are not traveling it as much, but this to me highlights that, and we've seen this in some of the data too, from airports around domestic or international travel that, uh, we shouldn't sleep on a potentially significant decline in domestic travel as well over the next year. That's interesting. Yeah. Very interesting. Yeah. Very good one. Natalie, you want to go next? Oh, if you want me to, but I think you should give out of my raise. That was good. That was a good one. Yeah. Yeah. Okay. I'm going to go with a negative number, a negative zero point three percent. Negative zero point three percent, um, is it related to retail? Okay. Go ahead. If I, if I would have been smart, I would have picked something to do with Utah, but I didn't, this, uh, this is, how much do you want me to give away? No, no, no. So is it, is it a growth rate then negative point three percent? Is it a growth rate, your percent change? Is it a job related number? It is. It is. You're good, Mark. Uh, is it in a certain state or industry, industry, no sector, not neither of those, um, but demographic, a certain demographic, um, site firm size. Oh, is firm, firm size. So this is, uh, is this data from ADP? This is ADP. Oh, okay. And this is small firms. Who did that? Who got small? That was me. That was me. Very good. Yeah. This is always taking credit. You see? God. In the data, the data that I'm thinking of the, you know, you're looking at November, I think it is year over year, uh, 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? 149 employees. Okay. 149. Yeah. Do you see this? I picked it because I'm sort of like, you know, this is, these are the people that are calling me insane. 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 aren't letting go. Right. Right. And to what do you describe that to? I mean, what do you think is 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 to explanation is, what we'd also say, I'd also say it's uncertainty related to policy that, 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 the 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 in income, gross income? No, it's gross, it's grossed, it's grossed, it's grossed income. Yes. It's gross. It's grossing. GDP, yeah, grossed domestic income. Yes. Grossed domestic income. Yeah. Natalie, see how this is done? You're a master class. Yeah. He knows that's my go-to. Right. I know. 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 the-- I know his tell. When he goes to this, this is with his nose. I know he's going to GDI. That's how I know. It goes like this for the podcast. GDI, it's GDI. You want to explain, Chris? OK. So GDI is another measure of total output. So the GDP measures total output by a spending category-- point me, 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% level. Right. That's a good one. OK. I think we're going to call this a podcast. This is recording this the Tuesday before Christmas. So therefore, 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 Adam, I hope-- I don't know what I hope for you, but you're on your own. Listen to good, not bad. All good. All good, my friend. Yeah, all good. And of course, Chris, thanks-- All the best to you and your family. And enjoy Florida. Yeah, thanks, I will. So Natalie, thanks so much for coming on. Yeah, 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. [MUSIC PLAYING]