The U.S. economy is predicted to grow 2 percent this fiscal year, and 2.2 percent in each of the subsequent years, fiscal year 2018 and 2019, Idaho chief economist Derek Santos told lawmakers today. “That’s pretty moderate,” Santos said. And Idaho’s economy is likely to also see moderate growth, he said.

“Think of Idaho’s economy as part of a train,” Santos said. “The U.S. economy is the locomotive, and then Idaho’s economy is one of the cars on the train. When the U.S. economy starts moving forward, Idaho gets tugged along. When the U.S. economy stops, we tend to stop. It’s not a perfect analogy, but it works pretty well.”

But there are factors that specifically affect the Idaho economy and its impact on state general fund revenue, he noted, including Idaho personal income, Idaho wage and salary growth, and Idaho housing starts. All are looking strong for the next few years. Idaho personal income, for example, is expected to grow 3.9 percent this year, 4.5 percent in fiscal year 2018 and 5.2 percent in fiscal year 2019. Idaho wages and salaries are expected to grow 5.6 percent this year, 4.8 percent in fiscal year 2018 and 5.5 percent in fiscal 2019. And housing starts are projected to continue growing. “These are important factors that tend to drive Idaho’s economy,” Santos said.

Nationwide, consumer confidence is on the upswing and household net worth is growing. “The consumers are the engine of growth for the economy right now, and for the foreseeable future,” he said. You can see the charts from his presentation here.

Santos noted that the national forecast from Global Insight that Idaho uses was issued the day before the election, and doesn’t take into account any changes of policy by a new presidential administration. “At this point we don’t even know what the proposals are,” he said.

Santos' final revised revenue forecast for this year came in nearly dead-on, within about $85,000 of the actual amount. When lawmakers asked how confident he is in the forecasts for the coming years, Santos said the only thing he can really be confident in is that his forecast will be wrong, saying, "In my profession, it's about getting close."