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Substantial growth in professional and business services employment spells good news for Utah’s economy. Growth in this industry—which encompasses accounting, telemarketing and temporary employment, as well as technical services like engineering or computer systems design—indicates that Utah companies are perhaps starting to feel the recovery and spend more on business-to-business services.
Utah’s unemployment rate for September is 5.4 percent, down from 5.8 percent the previous month, according to the latest data from the Department of Workforce Services (DWS). The unemployment rate has not been this low since the very end of 2008, said Mark Knold, chief economist for DWS. “That was right before the recession really began to explode,” he said
The state added 24,400 jobs during the past 12 months, bringing total employment to 1.25 million. About 73,100 Utahns are unemployed and looking for work, down from 86,000 people a year ago.
The professional and business services sector makes up nearly half of the total growth, with 11,400 new jobs—a 7 percent increase over last year. In comparison, the state as a whole expanded by 2 percent, according to data compiled by the U.S. Bureau of Labor Statistics (BLS).
Knold said the BLS numbers, which are based on employer surveys, very likely underestimate the state’s true employment growth rate. Employer data reported to DWS each quarter through the unemployment insurance program reflects a growth rate closer to 3.6 percent, he said.
“The Utah economy has really picked up over the past few months, and the survey simply hasn’t kept up with that,” Knold said. The survey will be “reset” in January 2013 and will then more closely match the numbers compiled by DWS, he said.
“There’s a good possibility the national data is being underestimated as well,” he added. The national employment growth rate is 1.4 percent, according to the latest BLS numbers.
In Utah, nearly every industry experienced growth during the past 12 months, with the exception of government and leisure and hospitality. The financial sector added 2,600 jobs, education and health added 2,400 jobs, and manufacturing grew by 2,300 jobs, as did the trade, transportation and utilities industry.
Natural resources and mining represents a small number of jobs in the state, relative to total employment. However, the industry is thriving and reported an employment growth rate of 5.8 percent, or 700 new jobs. Construction added 1,100 jobs in response to an improving housing market. Information added 1,900 jobs for an impressive growth rate of 6.5 percent.
Going into the final quarter of 2012, Knold predicted the overall growth rate will remain right around 3.6 percent. “I’m happy with 3.6 percent, but I don’t have it going much higher this year,” he said.
He also noted that for much of the past year, the drop in Utah’s unemployment rate was largely due to people who had stopped looking for work. “This current drop isn’t that,” he said. “People are getting jobs. People who lost jobs during recession are being absorbed back into the labor force.”