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Around Utah Facts
Each month, the Utah Department of Workforce Services publishes an employment summary for the state. The report is the best monthly description of Utah’s economic wellbeing and a gold mine of current economic information. In it you’ll find Utah’s latest job count, unemployment rate and employment by detailed industry. The latest report discloses several revealing and positive things about the Utah economy. It got me thinking the Utah economy could reach full employment by the end of the year.
Full employment is a concept, not a precise number. Most economists peg it to be an unemployment rate in the 4–5 percent range, although the spread varies depending on the economic area and the economist you talk to. Unemployment never drops to zero because some portion of the workforce is always in transition, moving from job to job. In these instances, unemployment is natural, not structural, and not a reason for concern.
I’ll go out on a limb and say full employment in Utah is around 4.3 percent—but remember it’s a concept, not an exact number.
Utah’s unemployment rate currently stands at 4.6 percent. It is a full three percentage points lower than the national average and ranks fifth lowest in the country (tied with Wyoming and Iowa). Only North Dakota, Nebraska, South Dakota and Vermont have unemployment rates lower than Utah right now.
That’s an impressive feat and an accomplishment many other states would love on their economic score sheet. Take our neighbors to the west: Nevada and California. Nevada has the nation’s highest unemployment rate at 9.5 percent. California is not far behind with 8.6 percent of its labor force actively looking for work.
No wonder Utah’s housing and construction industries are doing well—we have a steady supply of unemployed Nevadans and Californians migrating to the Beehive State for jobs.
The latest job report reveals several other positive and interesting facts supporting the notion that Utah’s economy is nearly at full health. Utah job growth registers at 2.6 percent, a full percentage point higher than the national average. While Utah’s current job growth rate is lower than recent months, it’s still strong and ranks third highest in the country. Only Texas and North Dakota can boast a higher rate of job growth right now.
During the past 12 months, the Utah economy created 32,600 jobs. Interestingly, every one of them came from the private sector. Private-sector job growth over this period tallied 3.7 percent, while the public sector contracted during the same period by 2.3 percent. Sequestration and other federal belt tightening are showing their sting. During the past year, approximately 700 federal jobs have been lost in the Utah economy.
Rural Utah is also doing considerably better than even just a few months ago. What was once primarily an urban and energy expansion has now spread to other corners of the state. The economies in 24 of Utah’s 29 counties are growing, some of them at a rapid clip. Job growth in Beaver, Wasatch, Juab and Utah Counties exceeds 5 percent.
Later in this issue, Utah Business takes a more detailed look at some of the economic trends in Utah’s counties, pinpointing the areas of strength and weakness.
It’s also impressive to note job growth by industry during the past year. Utah’s construction industry added 2,000 new jobs, a welcome addition and another indicator that housing is back.
Utah’s leisure and hospitality industry, which includes a big part of Utah’s tourism industry, delivered 4,200 new jobs over the past year. Technology jobs are also on the increase. The professional, scientific and technical service industry added 4,600 new jobs over the past year.
The trade/transportation/utilities industry created 10,900 new jobs in the past 12 months, which is another positive sign. Most notable, Utah’s automobile industry increased by 7.1 percent or 1,200 jobs during the past year. Car dealerships are doing well in Utah right now.
So Utahns are buying homes and cars again. Rural Utahns are seeing more job opportunities. Tourism and technology jobs are adding significantly to our job tally. Despite the sequestration hit, Utah’s private sector is delivering big time, adding 32,600 new jobs in the past year.
We are most certainly an economy on the move.
Good economic news doesn’t happen by accident. We are fortunate in this state to have great economic leadership. This leadership, combined with strong economic fundamentals, means we just may reach full employment by the end of the year. That’s great economic news for Utah families.
Natalie Gochnour is an associate dean in the David Eccles School of Business at the University of Utah and chief economist for the Salt Lake Chamber.