Jobs up, inflation down

Utah's employment growth rises again

It doesn't get much better than this. But how is it possible?

The Utah Department of Workforce Services reported Tuesday that the state's unemployment rate fell to 2.8 percent in September, down 1.5 percentage points from the same month a year ago. Job growth rose again to 5 percent for the month.

"If you ask yourself what's the best economic environment you could imagine, it'd look a lot like this," said Mark Knold, the department's senior economist. "It's high job growth, low unemployment."

About 58,300 new jobs were created during the year-over period. All of the job sectors measured by the department reported growth, led by the construction industry, which added 14,700 new jobs during the past year. The professional and business services sector added 11,100 jobs during the 12-month period. The information sector added the fewest jobs, at 1,100.

"I'm not so much surprised with the unemployment rate," Knold said. "I think there's room within that rate — if you're at 2.8 percent or 3.2 percent, it has the same characteristics.

"What surprises me is the employment growth. You have to have workers to be able to feed that growth, those new jobs, and what surprises me more than anything is the fact that we're still getting them. It makes me want to rethink where the workers are coming from."

Traditionally, economists and analysts have attributed Utah's job growth in large part to people who have been out of work returning to the work force, or domestic in-migration. But Knold said he's now looking at one other group: international in-migration, particularly from south of the U.S. border.

"The labor force that we have historically looked at is bigger now," he said. "It's more international, and you'd have to assume that a lot of it is from the south, people coming to look for work. There's probably direct communication dialogues between those who are here and those who are there, saying that there's work to be had."

If that's the case, Knold said, economists will have to re-evaluate the notion that the labor pool is limited in size or constrained.

"We'll have to seriously consider the possibility of an almost-unlimited labor supply coming from Mexico," Knold said. "And as long as the construction industry keeps booming, we'll probably continue to get workers. And we'll probably have to rethink our ability to maintain this (employment growth) rate. You'd think that eventually there will be constraints. But if Mexico is a brand new factor in the equation, then that breaks the mold, because you're pulling in workers from a new source."

Utah's construction industry saw unprecedented growth during the year-over period, Knold wrote in the department's report. Employment in the industry is now over 100,000 positions in Utah, an unprecedented level. And, with projects under way and those slated to begin — like The Church of Jesus Christ of Latter-day Saints' downtown redevelopment project — Knold said the industry is "poised to remain strong" going forward.

Earlier this month, the U.S. Labor Department reported that the national jobless rate was 4.6 percent in September. The nation's employment growth rate was 1.3 percent, the labor department said.

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E-mail: jnii@desnews.com

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