One of the county’s most visible employers, Hess Pumice, has been forced to lay off a number of employees from its Hess Lightweight division, which primarily handles the production of “wet cement” products for use in home construction.  

Due to the current economic conditions, which include substantially rising inflation and a marked slowdown in orders for new homes and construction, Creative Mines has had to reduce its workforce in Tooele, Mexico, and Malad.  

Mike Hess, owner of Hess Pumice, expressed his hope that “we hope we’ll be back to normal soon, but it’s hard to know what will happen in this economy without a crystal ball.”

The total number of employees affected was stated as 34, which constitutes 15% of the total workforce of around 220 across all divisions.  A majority of the jobs involved were staffed by individuals from Oneida County.

As has been reported over the last several months, inflation is approaching a 40 year high, with consumer costs rising at a rate significantly outpacing wage growth.  While employment is still at generally high levels, it has been softening since the Federal Reserve began increasing the benchmark interest rate over the last two months.  The interest rate increase has been historic, leading to a 1.75% present rate, the highest since the COVID outbreak.  The rate is anticipated by analysts to reach 3.75% by the end of the year, an increase of 1.5% from earlier expectations.  The raise in rates itself was the most dramatic since 1994.  The rise in rates is intended to stave off inflation, which decreases the value of wages in the market due to the price of goods, but it also has the effect of reducing job demand and availability as well as increasing short term borrowing rates.  This most directly affects mortgage lending and credit.  

Idaho Tax Rebates

Idaho itself has boasted record low unemployment numbers over the last four months, with a May figure of 2.5%, one of the lowest marks since records on the number have been kept, starting in 1976.  Economists have been sounding the alarm on protracted low unemployment as a flag for inflation since early this year.  The last month for which unemployment data was reported in Oneida county was April, and the rate was among the state’s lowest at 1.8%.  

At the state level, Governor Brad Little and the state legislature have focused most of their remediation efforts on tax-related solutions.  The most visible effort to this end most people will notice is the recently announced state tax rebate from the state, which has been issued to most taxpayers.  

According to the governor’s office, “Idaho has deployed 571,000 income tax rebates to households so far this year, totaling $190 million. The average rebate totals $333 per household. The Legislature approved $350 million in immediate tax rebates this year as part of Governor Little’s ‘Leading Idaho’ plan, so hundreds of thousands more households will receive their checks before the end of 2022. The plan also included ongoing tax relief so Idahoans will be able to keep more of what they earn in the years ahead.”

The specifics of the future tax relief plan are not available at present, but include reducing tax rates.  This year, the state has also chosen not to invest in the bond market to anticipate cash flow necessities, which lowers the overall potential debt burden on taxpayers.  Record surpluses, partly as a result of various federal emergency funds supplementing otherwise state-funded projects, have created a situation of outstanding solvency for the state budget.  Many of the federal disaster and emergency funds, however, will soon be ending.  

Gas prices begin to decline elsewhere, still rising in Idaho.

Most states across the country have begun to see modest declines in gas prices from recent peak highs.  As of June 21, the AAA reported that the average price of regular unleaded in the United States was $4.97, while the average price across Idaho was $5.19.  Locally, the cost has fluctuated between essentially those two numbers over the last two weeks.  Idaho often has higher gas prices in the summer than the national average.  Last year at this time the national average was $3.07, while Idaho’s was $3.30.  Prices in Utah are slightly lower ($5.18), while Washington ($5.53) and Oregon ($5.52) were notably higher.  Prices in Wyoming ($4.82) and Montana ($4.97) were notably lower.

Gas prices are one of the consumer goods that ripples throughout the economy in almost every sector.  Family budgets are obviously impacted by a larger percentage of household income being diverted to transportation, especially among multi-car families, and those with significant commutes.  Unexpectedly high prices also eat into margins for businesses who rely on shipping, or a transportation network for materials, or vehicle fleets.

The ongoing war in Ukraine is pointed to by economists as the most significant factor in the current oil crisis.  Not only has the invasion by Russia created disruption throughout the oil supplying world directly, but has also destabilized the global fuel market, leading to accusations of hoarding, price gouging, and market manipulation.  

Prices across the world are reflecting the same impact being felt in the U.S.  President Biden recently spoke with oil producers about increasing supplies, lowering prices, and increasing capacity.  The EPA has approved the year-round sale of E15 gasoline, containing 15% ethanol and reducing the overall cost.  Generally, this fuel type is restricted during the summer.  President Biden has also released fuel from the strategic reserve, which is believed to be reducing per gallon costs by between $.10 and $.35.  On the congressional level, there is currently a bill in Congress to place a ”holiday” on the federal gasoline tax, though it faces a great deal of opposition.  Congress recently rejected a bill to outlaw fuel price gouging.  

There is no consensus on how long excessively high fuel prices will last, or how high they might go, but the AAA predicts that prices are likely to potentially top $6.00/gallon on average by Labor Day.