Wednesday, March 16, 2005

The seasonally-adjusted unemployment rate for February registered 4.8 percent, down 0.6 percentage points from the unemployment rate of 5.4 percent registered a year ago in February 2004. Approximately 59,000 Utahns were unemployed in February 2005 as compared to 64,300 in February 2004. January’s unemployment rate has been revised upward to 4.9 percent. Utah’s other primary indicator of current labor market conditions, the year-over change in the number of nonfarm wage and salaried jobs, is at its best level since 1997, registering 3.7 percent growth. January’s growth rate has been revised upward to also measure 3.7 percent. Tani Pack Downing, Executive Director for the Utah Department of Workforce Services commented, “What a difference a year makes. A year ago, Utah was still in the early stages of its rebound from an unprecedented recessionary period. We were adding new jobs, but the economic environment was still somewhat tepid. Now, however, Utah stands second in the nation in employment growth at 3.7 percent, trailing only Nevada.” Mark Knold, Senior Economist for the Department of Workforce Services noted, “It’s becoming increasingly clear that the demographic trends that continued unabated during Utah’s recessionary period of the early 2000s are now the responsible agent for Utah’s current strong economic performance. Utah’s population growth continued during that economic slow period, as did in-migration. Ultimately the civilian labor force grew beyond the job market’s ability to absorb this growth. Potential was greater than reality. Potential is now trying to catch up with reality. Population demands goods and services, and eventually the market will have to adjust and accommodate this population growth. Utah’s current movement into one of the best employment growth rates in the country is a direct result of the correction of this demographics-to-employment-growth imbalance. The economy is playing catch up to the population growth. An interesting aspect of this growth is where it’s happening ¾ largely outside of Salt Lake County. Washington County is currently seeing an almost unreasonable economic boom. Cedar City is also growing rapidly. Other areas of growth to note include Summit County, Wasatch, Davis, Utah, even Uintah and Duchesne counties out in the Uintah Basin. The only county in the entire state with a year-over employment decline is Daggett County in eastern Utah. The current economic environment is starting to look a lot like the prosperous years of the 1990s. Having painted this rosy picture though, one still needs to understand that the entire job market doesn’t just turn around overnight. The overall theme of the economy is that it is improving, but there are still stories available about people not finding work, or at least what they feel they are qualified for. The market doesn’t improve overnight for everyone. Yes, Utah’s market is looking much better, but it will still take more time for the overall benefits to trickle down to a larger and larger segment of the population.” Since February 2004, the United States economy has added 2.4 million new jobs, a growth rate of 1.8 percent. The Utah economy has added approximately 40,100 new jobs, a growth rate of 3.7 percent. The Utah additions represent about 1.4 percent of all the new jobs added in the United States over the past year. One of the better performing industrial sectors in Utah is construction, which added around 6,600 new jobs across the past year. Knold commented about this industry, “Construction has been a pleasant surprise and has really bounced back strong. We knew there would be a construction employment decline after the buildup to the 2002 Winter Olympics. We also knew that construction employment would eventually bounce back. The question was when? I guess we can say the fortunate part is that the bounce back is now, not still down the road as we had anticipated. Missing the forecast may bruise an ego or two, but that’s okay, because it means the economy is going strong and that things are getting better quicker than anticipated. If you look at the amount of announced and anticipated construction projects going forward, this healthy construction environment should continue right on into 2006.” The largest amount of growth is in the trade, transportation, and utilities industry. Around 7,600 new jobs have been added over the past year. Knold observed, “This is an industrial sector that acts in direct proportion to population increases, particularly its largest subcomponent ¾ retail trade. There have been many new retail developments springing up over the past year. Wal-Mart has added stores. Kohls entered the Utah market, and other national retailers have expanded their operations here. The attention of the national retailers toward Utah is something one pays attention to because these retail chains don’t take expansion moves lightly. They are a discerning bunch, and for them to be this aggressive in Utah tells you what they think about the Utah market.” Another area with strong employment growth is professional and business services, adding approximately 5,500 new jobs over the past year. These gains are a mix of high-paying, knowledge-based professional jobs, and also more mundane jobs found within the temporary help and employment services areas. The employment services areas grew by roughly 2,700 positions. The professional level jobs grew by around 2,200. All of the remaining industrial sectors have added new jobs over the past year. Education and health services has added around 4,400 new jobs, leisure and hospitality another 3,900, government approximately 3,600 jobs, and even manufacturing is getting into the act with the addition of 2,700 new jobs. 9:00:16 AM