From Deseret News archives:

Utah's momentum is high

Slowdown called unlikely to derail state economy

Published: Wednesday, May 18, 2005 9:27 a.m. MDT
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Though the state's economy shows some signs of slowing, Utah has built enough momentum to weather the drag, according to a report released Tuesday.

The Utah Department of Workforce Services reported that the state's seasonally adjusted unemployment rate was 4.9 percent for April, down 0.4 percent from the same month a year ago and virtually unchanged from the unrevised rate of 4.8 percent for March 2005. About 60,700 Utahns were unemployed last month, compared to 63,000 in April 2004.

"We still have a good economic environment here," said Mark Knold, the department's senior economist. "It has a lot of momentum going, even to the point that some economic shocks or negativity, such as energy price run-ups, aren't enough to derail the situation. It might slow it down, but I don't think it's enough to derail."

Total employment, the year-over change in the number of nonfarm wage and salaried jobs, was 3.5 percent, which was down slightly from March's unrevised 3.7 percent.

Professional and business services added the most new jobs, 7,300, followed by trade, transportation and utilities, which added 6,900 new jobs. The "other services" category gained the least, adding 600 jobs, while the natural resources sector reported 700 new hires.

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"I think they're all rolling along pretty good," Knold said of the sector-by-sector growth. "In the past, there were some laggards: the information sector, for example. But the IT sector is now rolling along at 3 percent growth, so it's kind of picked itself up a little bit.

"The technology sector, though it's not a category of its own, seems to be finally showing some signs of life. That industry took a little while to join the party, so to speak. It was still pretty flat as of the end of last year, but we're now seeing employment gains there and venture capital flowing that way again."

Knold attributed the building momentum in part to population gains.

"We had population gains over the last seven to eight years while the economy has underperformed or not performed to its historical average," he said. "At some point in time, the economy has to catch up. The forces that get built up with those population gains finally get unleashed — people make money, so they spend money and need services. I think we're in that kind of environment now, which I think will allow us to weather some economic downturns."

Nationally, the U.S. Labor Department reported earlier this month that the jobless rate remained at 5.2 percent in April. But total employment increased by 274,000 jobs, surpassing by about 100,000 jobs analysts' expectations.

Looking ahead, Knold said Utah's economy is likely to moderate, at least by the numbers.

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