Economic summit

Interest rates and the impact of the declining birth rate on the local and national economy were primary topics of discussion during the Greater Cache Valley Economic Summit Tuesday.

Northern Utah residents and business owners attended to hear from representatives of Cache and Rich counties, two Utah State University economic experts and the founder of a macroeconomic consulting company.

Hosted by the Cache Valley Chamber of Commerce at the Riverwoods Conference Center, the summit’s keynote speaker was Access/Macro founder and chief economist Tim Mahedy.

Mahedy presented about the national economy, focusing on interest rates and the Federal Reserve, and how future interest rate decisions may impact banks, first time homebuyers and businesses seeking loans. He called the United States economy “strong but fragile.”

“Strong in the sense that it is showing healthy growth, but the underlying pieces of it are a little concerning,” Mahedy said.

He referenced uncertainty from the Federal Reserve about when to stop lowering interest rates, imbalance in the labor market and a perceived increase in risk around U.S. Treasury bonds. Mahedy discussed policies proposed by Federal Reserve chair nominee Kevin Warsh, who has said he plans to shrink the Fed’s balance sheet if appointed.

Mahedy suggested Warsh’s policy relies on a perceived lack of trust in the Fed. He predicted that while the policy may lower short-term interest rates — a positive for banks and credit card spending — it would result in high mortgages and borrowing costs for homebuyers and businesses.

Regarding the labor market, Mahedy said because the birth rate is down, there are fewer laborers in the market.

“When you have less labor, you need fewer jobs every month to keep unemployment up,” said Mahedy, pointing to this as one of the reasons the number of jobs available has come down.

Mahedy said this could be a good thing, but the distribution of the jobs available is concerning, because the jobs being created are disproportionately concentrated in specific sectors like healthcare.

“We are not in a recession, but it is a balancing act. The labor market right now is kind of on one foot,” Mahedy said, noting that if the areas of the economy with high concentrations of jobs begin to weaken, it could cause real issues for the labor market.

USU Professor of Economics Scott Findley also discussed the impact decreasing birth rates have on the economy.

With the median age at which women are getting married and having their first child both trending upward, and the number of children families are having trending downward, Findley said economists are projecting that by 2040, more walkers and wheelchairs will be sold each year than strollers and baby carriers.

Findley suggested business owners prepare for and adjust to this shift, giving examples like building homes with fewer bedrooms or offering more services for retired residents.

Cache County Executive George Daines gave a “state of the county” report and shared his goals to drive economic development.

According to Daines, Cache County’s 19 cities are home to around 150,000 residents. The county is growing at a rate of 2-3% a year, with the taxable real estate value increasing 3-4% a year.

To accommodate that growth, Daines said the county is looking at the past to understand the future.

“We need to recognize that change is coming and we need to harness the change to make it work for us rather than against us,” Daines said.

Daines highlighted three goals he has for his time as county executive — to operate efficiently, improve and maintain access to roads and trails, and to alleviate housing unaffordability.

Hurdles he identified to those goals include navigating the “web” of federal, state and local governments, balancing the status quo with needed change, facing political opposition and the turnover in elected officials.

“I’m in favor of economic development, but most of all I would like to preserve our quality of life," Daines said.