Utah economy hangs tough

Higher energy prices continue to put downward pressure on job growth, though the state's senior economist maintains Utah's economic environment remains "adequate."

The Utah Department of Workforce Services reported Tuesday that the seasonally-adjusted unemployment rate for November was 4.6 percent, down 0.7 percent from the same month a year ago. About 55,800 Utahns were jobless in November, compared to 63,700 in November 2003.

"It's really kind of performing like I thought it would — that we'd have growth throughout the year, even higher growth than I anticipated, but that it would level off," said Mark Knold, senior economist with the department. "As we go through the winter months and into the spring, we may slip even more."

Total employment, the year-over-year change in the number of non-farm wage and salaried jobs, increased 2.9 percent in November, matching October's revised 2.9 percent rise.

Trade, transportation and utilities led the jobs growth, adding 6,000 jobs in November. Construction added 5,900 workers, while education and health gained 5,000. Professional and business services added 4,700 jobs. Information technology continued to lag, adding 400 jobs last month.

Knold predicted that job growth may continue to slow through the winter to 2.5 percent, building to about 3 percent in the latter half of 2005.

"The reason why is energy costs," he said. "It's just enough to trip up the economy, slow it down, put a little bump in the road. There's still the possibility of completely crashing it, and I am puzzled by the fact that the price at the pump hasn't matched the $50 per barrel price (of crude oil). I'm not sure why that is, and it may yet happen."

But, Knold said, "To me, the energy problem window is now until April. If we can get past the winter, if we don't have a problem, then I don't see anything coming in to trip up the economy."

If the winter is harsh and fuel prices climb, Knold warned that the nation could be headed back into recession. As it stands, he put the odds at 30 percent.

"If you put it on a graph, every single oil price spike has been followed by a recession," he said. "The current one, on a graph, it looks like a spike."

Still, he said, even if the rest of the country falls into recession, Utah may not.

"Whether we have a national recession over this energy thing or not, I don't anticipate that Utah will be hit by it," he said. "We've ridden right over recessions before. We rode over the previous recession. I see that there's enough momentum in the economy to push us over any recessionary downturn that could come."

Signs to watch for, according to Knold, include cutbacks in consumer sales, drops in job creation, high upticks in layoff numbers and an increase in uninsurance claims.

Earlier this month, the U.S. Bureau of Labor Statistics reported that 112,000 new jobs were added nationwide in November. The nation's unemployment rate edged down to 5.4 percent.

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E-mail: jnii@desnews.com