Montana personal income expected to drop $6.4 billion, up from $3.9 billion

“Town Crier” newsletter – Briefs from the Region (2) – 5/20/20

According to the Bureau of Business and Economic Research at the University of Montana, personal income in Montana is expected to be $6.4 billion lower in 2020 than 2019 mark, an even more dramatically stark picture than the $3.9 billion estimated in April. The former represents an 11.7 percent drop in personal income for residents of the Treasure State, significant by any measure or era. “There remains little doubt that the Covid-19 pandemic has produced a recession that is more severe than anything Montana has experienced in the postwar period,” bureau director Dr. Pat Barkey and colleagues wrote in a new report. “The U.S. economy has already experienced a sharp contraction in the first quarter of 2020, and when the comprehensive data for Montana economy become available doubtless they will indicate the same.” Worse still, the group’s projected economic recovery rate continues to downgrade, meaning each month the projected date for a full recovery continues to push backward. According to The Missoulian, Dr. Barkey cites three primary reasons that projections continue to worsen: new data suggests social distancing will have broader negative impacts than originally thought; new assessments that show an increasing number of job losses will be permanent; and a worsening outlook for the impacts of upheaval in oil markets. Additionally, the IHS Markit, a London-based financial research and analysis company, projects the U.S.’s GDP will decline by a whopping 7.2 percent in 2020, worse than that seen in the Great Recession between 2007-2009. The BBER’s next projection will arrive this summer, and Dr. Barkey notes the situation is “very fluid.”