Whispers have turned into shouts as national economists discuss the likelihood of a recession thanks to a tail-spinning housing market and skyrocketing foreclosure rates. While the worst of it may never hit the Gem State, many experts say the state will feel the effects.
"There are clearly clouds on the horizon," said Michael Ferguson, chief economist for the Idaho Division of Financial Management. "Some are national and global, and others are specific to Idaho.
"The economic forecast is for a slowdown, but not an actual retreat," he said. "In any event, Idaho would fare. well compared to the nation as a whole."
The drop in residential housing construction is the leading factor in Idaho. Unemployment numbers have steadily crept upward since the spring, and if December's numbers are up as well, it will be the first time rates have risen for three consecutive months since 1982, according to Bob Fick, communications manager for the Idaho Department of Labor.
The jobless rate has risen from 2.3 to 2.7 this fall, but Ferguson points out that is still half a point lower than last year and two points lower than the national level.
The majority of the new applicants for unemployment benefits are coming from the construction and extraction fields. Already, the number of applicants in that category is up 50 percent over last year, Fick said. Last year, 10 percent of total filings came from construction; this year, that number is up to 15 percent.
While construction is down, Ferguson said Idaho has yet to see a marked decrease in the price of houses. "We're lagging, but we're not immune," he said.
Fick said seasonal employment is also down, with retailers hiring roughly half of the holiday help they typically do.
Others are decidedly optimistic about Idaho's future.
Paul Hiller, executive director of the Boise Valley Economic Partnership, said November sales numbers were surprisingly high.
"Everyone gloomed and doomed about it," he said. "It seems to me it's more rhetoric than downturn, and rhetoric causes downturn. The biggest concern in the economy is the self-fulfilling prophecy."
Hiller said despite the hype, the Christmas buying season will be a strong one.
Fick credits Idaho's resilience against recession to the economic diversification of the last 15 years, as the state has depended on fewer agriculture, mining and logging jobs and moved toward manufacturing and technology.
"It spreads the pieces of the economy out to the point where, if one starts to sag, it doesn't show as badly," he said.
Ferguson said that on a national level, some of those high numbers may be a degree of denial, as shoppers try to defy the analysts and not let the forecasts cast a shadow on the holidays. But he points out that consumer debt is up 2.5 percent nationally.
"That suggests people are borrowing to support the increases in spending," he said. "That's worrisome when you consider we're already at historically high levels of debt and [we've] removed the code to the ATM."