November 1, 2011

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Article

A Multi-speed Economy

Will Utah’s Economy Return to its Full Potential?

Natalie Gochnour

November 1, 2011

This month begins the ever-important holiday shopping season. Retailers make, miss or exceed their yearly projections during the next several weeks. I’ve been monitoring the numbers and watching consumer behavior to get my own read on what’s happening. Here’s my take.

Utah’s economy right now is operating at multiple speeds. A visit to your local Costco or Sam’s Club on a Saturday verifies that Utah consumers are filling their carts. It feels the same way at Fashion Place Mall, The Gateway, University Mall and other commercial venues where crowds are thick and parking is thin. Utah’s economy is growing and people are spending. It’s beginning to feel like Utah again. This is the speed of progress.

There is another economic speed that I see in the eyes of Utah business professionals. This speed reflects a more cautious attitude born out of analysis and experience. They recognize the bumps and curves that may lie ahead. They are hiring and spending, but not like they want to. They want to lean into the curve, but something tells them, “Go slow, buckle up, be careful.” They travel at the speed of caution and it slows our recovery, even as we slowly expand.

Unfortunately, there is still another speed that is a close cousin to caution. It is the speed of fear and it underlies much of what is happening outside of Utah. The speed of fear works like a pace car. Utah business leaders want to push the pedal closer to the metal, but the car in front of us blocks our path. The European debt crisis and the global repercussions loom large. Talk of another “Lehman-like event” creates a braking effect on the global, national and Utah economies. The internationally respected Economist magazine runs cover stories entitled “Be Afraid” and we all sigh at yet another inexcusable political showdown in Washington, D.C.

These three economic speeds mean that the Utah economy will not return to its full potential any time soon. We will grow, but not at a level that meets our expectations. Full employment will elude us in the near term. We are a lonely economy right now.

I have a favorite song about the speed of loneliness. It’s a John Prine classic about a personal relationship, but it can also be applied to the Utah economy and the sense of emptiness many of us feel.

“You come home late and you come home early. You come home big when you’re feeling small. You come home straight and you come home curly. Sometimes you don’t come home at all. What on earth has come over you? What in heaven’s name have you done? You’ve broken the speed of the sound of loneliness. You’re out there running just to be on the run.”

The can-do spirit in all of us compels us to move past economic loneliness and into action. I read a quote recently by Charles Vest, the former president of MIT, that inspired me. He said our economy “…requires a public awakening, establishment of political will, resetting of priorities, sacrifice for the future, and an alliance of governments, businesses and citizens.”

If we want to accelerate our economic speed and transition away from the speed of loneliness, we need an economic awakening. We need to rally. We need to sacrifice. We need to unify.

I just wish it could happen before the end of the 2011 holiday season.

Natalie Gochnour is the chief economist at the Salt Lake Chamber. She served as a state economist for 18 years, working for three Utah governors, and was a political appointee in the Bush Administration. You can follow her on Twitter at @Gochnour.

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