Stronger Idaho economy, small business awards mark Meridian chamber event

Inflation and high prices at the grocery store are still gravely impacting the U.S. economy, but Idaho continues to shine as one of the nation’s economic bright spots, especially in the labor market, according to Robert Spendlove, a senior economist and public policy officer for Zions Bank.

Idaho’s positive economic outlook was one of several key messages Spendlove delivered during his keynote address to local business leaders at the recent Business Excellence Awards luncheon sponsored by the Meridian Chamber of Commerce.

“Idaho continues to be one of the strongest states economically in the country,” Spendlove told a group of about 125 attendees who gathered for the annual celebration. “We’re having growth and price pressures, but it’s a sign of our continued strength of our market and of our state.”

A symbol of that strength was evident in the seven local businesses honored during the event that was held Aug. 29 on the main campus of the West Ada School District.

Honorees for 2024 included: Studio Architects, Small Business of the Year, one through 10 employees; MAX Giving, Best Philanthropic Organization; Plumbing Solutions of Idaho, Small Business of the Year, 11-50 employees; Woods Insurance, Best Women-Owned Business of the Year; Tier 1 Electric, Best New Business of the Year; Cottonwood Creek Behavioral Hospital, Small Business of the Year, 50 or more employees; and IBL Events, Inc., Small Business Leader of the Year, Nick Aldinger.

With a total of eight employees who he fully credited for what he called a “team award,” Aldinger said he felt Spendlove’s economic message was delivered on point.

“We follow the markets closely because that definitely impacts our business,” Aldinger said. “We’ve definitely seen an uptick in job seekers. So, we want to keep an eye on how the economy is moving for our state.”

According to Spendlove, Idaho’s labor market, unlike the rest of the country, is trending in the right direction, especially in the Treasure Valley.

“Nationally, the growth rate is 1.6%, Idaho checks in at 2.7%, but Ada County is 3.4%,” he said.

And when it comes to unemployment figures, Spendlove said most people think it’s best to have a real low rate, but he explained why it’s not.

“If unemployment is too low, then businesses, like those of you here today, can’t find the people you need in order to grow,” Spendlove said. “I think Idaho is in a sweet spot ranked at 25th. We’re dead middle in the country.”

Based on figures Spendlove shared with the audience, he said he’d be “more nervous or concerned” if the unemployment rate in Idaho were to jump to 4 or even 4.5%.

“His comments on where we are with unemployment, not being too low or too high was actually reassuring because we still do have a lot of jobs to fill,” Aldinger said. “There is a lot of growth potential here, especially in the small- and medium-size business realm. I think that is where Idaho shines compared to other states.”

That message was also well received by Tony Nicholson, an assistant vice president and branch manager with WaFd Bank.

“His numbers and explanations make me think things will be good for us in the banking industry,” Nicholson said. “We have a hard time finding workers. We’re about 5% understaffed currently.

We run pretty lean, particularly on the operations side.”
Along with employment, inflation is the other mandate Spendlove said the Federal Reserve is tasked with focusing on. He detailed how he sees the Fed moving forward to pivot from what he described as “restrictively high interest rates to lower rates.”

According to his analysis of recent data, the Fed is projecting interest rates will drop to 4.9% this month, and possibly even 4.2% in December.

Capitalizing on a recent quote shared by Fed Chair Jerome Powell, “The time has come for policy to adjust,” Spendlove said Americans have been “living in chaos of low rates to high” the past few years.

“When does it get back to normal,” he asked. “The question is how far and how fast will the Fed go.”

In the spring of 2021, inflation soared to 9%, which caused the agency to raise interest rates in an attempt to slow the surge. This was a huge change for many Americans, especially in Idaho, who had grown accustomed to stronger financial times based on low rates.

“We’ve been operating based on that assumption of very low rates for the past 15 years,” Spendlove said. “We’ve been saying ‘we can get a home mortgage for 3%, a 0% interest rate on a car, access to capital easily for our start-ups.’ It was at that very low level for about 15 years and what it did was spoil us.”

And while inflation has dipped nationally to about 3% today, and even lower on the local level at 2%, Spendlove said people are tired of “being told things are better when it does not feel as if things are better.”

“Even with inflation going down, prices are still up 21% since 2020,” he said. “And I will tell you they are not going back down. They are never going to go down the way the public wants them to. That is why people are grumpy.”

Throughout his address, Spendlove cited other factors impacting inflation, particularly the housing market.

“The change in inflation is really being caused by housing and by the service sectors,” he said. “Traditionally, in past economic cycles, those are the ones that are tough to get back to normal.”

The cycles he referred to brought back a lot of memories from what he told the audience were economic “lessons learned from the 1970s.”

“We saw a similar dynamic then. The Fed raised rates to try to slow down inflation and it caused a recession,” he said. “They got nervous and backed down, and inflation then re-heated. During this time, it happened in three separate cycles.”

It was only when the Fed really got aggressive and really raised rates, he said, that they got inflation under control.

“The question is are we done with inflation, or are we now done with the first cycle in a series of cycles of inflation?”

Ever the optimist, Spendlove believes there is a silver lining on the economic horizon, especially in the Gem State.

“The strength of our economy, of our local economy, it’s the people in this room,” he said.

And that’s a message Sean Evans, president and CEO of the Meridian Chamber of Commerce, echoed and strongly believes as well.

“This awards session is an opportunity to connect, to share our experiences and to inspire each other to reach even greater heights,” Evans said. “Today is about celebrating the vibrant spirit of entrepreneurship and the innovation within our community. These are not just business owners, managers and employees, but leaders who have navigated challenges, seized opportunities and made a lasting impact on our community.”