Economist: Workers in 'bunker mode'

COEUR d’ALENE — Sam Wolkenhauer said Friday the government shutdown has put a pause on employment numbers and other pieces of crucial economic data.

The Idaho Department of Labor economist spoke to the Coeur d’Alene Rotary Club at The Coeur d'Alene Resort about the weakening of the economy in 2025, using language to indicate pessimism without creating feelings of panic. 

Growth this year was solid until March, but then significant movement across the board stopped, he said.

“Nothing’s happening,” Wolkenhauer said. 

In Idaho, the construction industry didn’t pick up in April like it usually does. Instead, it plateaued. However, Wolkenhauer said there is time for the economy to right itself.       

“We’re not using that dreaded word recession,” Wolkenhauer said. 

The manufacturing and construction industries went notably flat this year in terms of growth.  

Wolkenhauer said payrolls in the state are very good, but people are staying in the same jobs and homes because the market has stopped rewarding change as it did in 2022. 

“The economy is inspiring people to go into siege mode, bunker mode,” Wolkenhauer said. 

In 2022, 45 million people quit their jobs. By switching jobs, many were able to make a 9% income gain in 2022. 

Today, that wage premium is gone for switching jobs, Wolkenhauer said, adding that he wishes the outlook was more optimistic.  

“The labor market has weakened to the point where workers are not incentivized to test it,” Wolkenhauer said.   

He compared the job market to a game of musical chairs where the music has turned off, but no one has made a move to get a new seat. 

“We are not seeing an increase in the number of people filing for unemployment. However, the economy is struggling to reabsorb people who were laid off,” Wolkenhauer said.    

Wolkenhauer said buying a home has become even more difficult, with prices remaining high and mortgage interest rates still above 6%.

"You don’t really want to be buying your first home now,” Wolkenhauer said. 

The only two industries that showed growth this year are health care and data centers related to the AI industry. 

“Some people are comparing AI to the dot-com bubble,” Wolkenhauer said.  

When asked why more jobs haven’t been created, Wolkenhauer cited a few theories as potentially contributing factors. 

He said consumers may be reaching debt saturation or fatigue and said corporations have paused hiring to see if those jobs can be outsourced to AI. He said there is also economic uncertainty related to tariffs and the fear of the unknown.

“Consumers really seem to be tapped out,” Wolkenhauer said.