September 23, 2013

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Article

Utah’s Unemployment Rate Won’t Budge

By Heather Stewart

September 23, 2013

The state’s unemployment rate was 4.7 percent in August, according to the latest report from the Department of Workforce Services. The rate has bounced between 4.6 percent and 4.7 percent for the past five months.

Utah started out the year with an unemployment rate of 5.4 percent, which steadily declined until April, when it hit 4.7 percent and essentially stayed put.

Carrie Mayne, chief economist for DWS, said the stagnant unemployment rate obscures the fact that the state is experiencing employment growth. “The job growth rate is really where the story is told,” she said.

In August, the state’s employment growth rate was 2.7 percent and, year over year, 33,200 jobs were added to the economy. The reason the unemployment rate remained firm while job growth expanded is due to people newly entering the workforce. Some of those people get jobs quickly, said Mayne, while others are counted as unemployed.

Currently, about 65,000 Utahns are unemployed and actively seeking jobs.

In February and March, the state had a very robust employment growth rate of 4 percent. By summer, that growth rate had fallen below 3 percent, registering at 2.2 percent in June. The state’s long-term average employment growth rate is 3.1 percent.

“Utah’s expansion continues on track, though there will always be months below average,” said Juliette Tennert, chief economist for Gov. Gary Herbert. “Since the recovery took hold more than two years ago, Utah has consistently grown at about twice the national rate.”

The national job growth rate was 1.7 percent in August; the national unemployment rate sits at 7.3 percent, down slightly from 7.4 percent last month.

Every private-sector industry in Utah accrued job increases from the previous year. The largest increases were in trade, transportation and utilities (10,500 jobs), leisure and hospitality (6,800 jobs), and education and health (5,500 jobs).

Mayne also noted that the information sector continues to flourish in Utah. “That is one of our brighter spots,” she said. “We’ve got this corridor of technology in the northern Utah County and southern Salt Lake County area, and that is showing in our numbers.”

While the overall employment numbers in the information industry are not large—it accounts for about 35,000 workers—these are valuable, high-paying jobs, said Mayne. And its job growth rate sits at 12 percent.

On the other hand, the construction industry is not faring as well as many hoped. Based on permitting data, said Mayne, “we expected construction employment to be on a bit stronger path than it is on.”

The construction industry is adding jobs, but its growth rate of 1.6 percent is unusually low. Mayne said there may be an anomaly in the survey data that will be corrected when the hard numbers come in.

Another factor tamping down employment growth in Utah is the effects of sequestration, said Mayne. Sequestration is impacting federal government employment, as well as private-sector contractors. 

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