While our Misery Index report of last December offered estimates for 2022 that were not encouraging due to ongoing inflation and rising interest rates, it seems that final data has confirmed Utah’s resilience.* Preliminary estimates suggested that Utah’s Index would approach that of the country as a whole in 2022. Instead, Utah’s Index has remained two points below the U.S. average due to relatively low levels of unemployment and a relatively high GDP provided by determined expansion of the manufacturing, real estate, IT, professional services, and financial sectors.**
In addition, Utah consistently fares as well as or better on the Misery Index than its neighboring states. In 2021, Utah was second only to Wyoming in the Mountain States, due to that state’s rebounding growth, with Idaho and Montana very close behind. In 2022 however, Utah was outperformed by Colorado and Idaho, with the latter faring better than the entire country in Index terms. This is due to Idaho’s recently high (but declining) GDP growth.
Interestingly, Wyoming fell to the bottom fifth of all states in 2022. This highlights the significant impact of labor markets. Despite positive net migration, Utah, Colorado, and Idaho have all seen unemployment rates fall even as economic conditions have tightened through 2022 and 2023. Wyoming has experienced the opposite – likely as a result of a dependence upon the extractive sector of its economy in an environment of declining energy prices.
In short, while other states may migrate in an orbit around Utah’s Misery Index performance, the diversification of our state will likely provide more consistently impressive results.
* The Misery Index is an index of financial “misery” that the Utah Foundation uses to compare Utah to neighboring states, the U.S., and the world. The Utah Foundation uses Hanke’s Misery Index as its preferred measure of financial strife. It was created by Steve Hanke, a professor of applied economics and founder and co-director of the Institute for Applied Economics, Global Health, and the Study of Business Enterprise at Johns Hopkins University.
** IBIS World, Utah Economic Overview, https://www.ibisworld.com/united-states/economic-profiles/utah/#:~:text=Utah’s%20gross%20state%20product%20(GSP,the%205%20years%20to%202022.
Misery Index sources:
- U.S. Bureau of Labor Statistics, Local Area Unemployment Statistics
- U.S. Bureau of Labor Statistics, Consumer Price Index, All Urban Consumers
- Federal Reserve Economic Data, Bank Prime Loan Rate
- U.S. Bureau of Economic Analysis, Regional Data, GDP and Personal Income
See the Utah Foundation’s Misery Index report here: https://www.utahfoundation.org/reports/the-2022-utah-misery-index-a-glimpse-into-the-fiscal-measures-of-happiness/
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