Job growth likely to slow

Utah's rousing job growth rate may be unsustainable, leading to moderate slowing toward the end of the year and into 2007, according to a report released Tuesday.

The Utah Department of Workforce Services reported that the state's unemployment rate was 3.1 percent for June. About 40,000 Utahns were jobless last month. A year ago, the unemployment rate was 4.3 percent.

Meanwhile, the state's employment growth rate — measuring the change in the number of nonfarm wage and salaried jobs — was a blistering 4.8 percent, compared to the national employment growth rate of 1.4 percent.

"Jobs — there seems to be a lot of them brewing in this state," said Mark Knold, senior economist for the department. "We're approaching 5 percent employment growth, combined with the unemployment rate continuing to go lower. It really is very low. . . . This is an economy maxed out, an economy going at full speed, 80 miles an hour on a 70 mile-an-hour highway."

The construction and professional and business services sectors combined to account for about half of the new jobs created during the past 12 months, the department reported. The construction sector added the most jobs during the year-over period, swelling by 12,900, while professional and business services added 12,500 jobs.

The trade, transportation and utilities sector added 8,500 jobs during the past year, while the education and health sector added 5,300 jobs.

Geographically, the Uinta Basin saw particularly impressive growth during the past year, largely due to a boom in its oil and gas industry, Knold wrote in the report.

"The tri-county Uinta Basin area produced an employment growth rate of 14 percent over the past year," Knold wrote. "It shouldn't be surprising that the high cost of oil and natural gas has spurred a nationwide increase in the exploration and development of new sources of these energy components.

"Both Uintah and Duchesne counties are seeing a boom that rivals the rapid employment growth that went along with their last energy boom in the 1970s. Is the area building up for another collapse? Probably not. The energy environment has changed much since the 1970s. If tar sand or oil shale development ever comes to fruition, then Uintah County hasn't seen anything yet."

However, assuming that doesn't happen in the next few months, Knold said history suggests the state will see some slowing in its rate of job growth.

"The last time we were in this kind of environment, it was late 1997," he said. "The employment growth rate actually slowed in 1998, 1999 and into 2000, while the unemployment rate remained low. The labor force just couldn't keep up with the growth in the economy.