From Deseret News archives:
Utah jobless rate dips 0.2%
Analyst warns economy has likely peaked for year
However, a Utah Department of Workforce Services economist warns that it is likely the state's economy has peaked for the year, stymied by high energy prices.
The department, in its monthly jobs report released Tuesday, found the jobless rate down slightly from its May 2005 mark. The state's other primary labor market indicator, the year-over growth in the number of nonfarm wage and salaried jobs, was 3.3 percent, equalling May's revised number.
"It's confirmation, in terms of job growth, that we've peaked and are kind of moving along sideways now," said Mark Knold, the department's senior economist. "You have to attribute it to higher energy prices, which kind of 'lopped off the steam,' so to speak."
The trade, transportation and utilities sector reported 5,700 new jobs during the year, followed by a 3,900-job gain in education and health. The state government added 3,300 new jobs over the past 12 months, while the leisure and hospitality industry reported 3,200 new hires.
Two sectors — professional and business services and construction — accounted for 40 percent of the new jobs added during the year-over period, according to the department. Professional and business services added 7,600 new jobs over the past year, while the construction sectors reported 6,900 new hires.
"I'm still impressed with the construction industry, the strength with which it's moving forward," Knold said. "It's not just new houses. It's commercial activities as well. Those kinds of things are an investment, a picture of the market's investment activity in Utah.
"And it's a sunny outlook on the Utah economy. In that respect, we haven't really gotten started at all, with the huge renovations of downtown that the (Church of Jesus Christ of Latter-day Saints) has planned. We're chugging along, and there are some big projects yet to come."
Still, Knold was cautious about growth prospects for the short term.
"We're still growing. It's just that the rate of growth had been going higher and higher, and then the energy prices took the steam off that upward climb," he said. "I don't anticipate that the rate of growth will be picking back up again this year. I think the energy prices are enough to take the momentum off that one, and I don't expect (the prices) to drop off significantly.
"The economy needs time to 'accept' $45 or $50 per barrel (oil) prices, and plow through it psychologically. It takes time to do that. (Next year) holds more potential for the growth rate to accelerate again."
Earlier this month, the U.S. Labor Department reported that the national civilian unemployment rate dropped to 5 percent in June, down a notch from 5.1 percent in May. June's jobless rate was the nation's lowest since September 2001.
E-mail: jnii@desnews.com
