Jobless rate, index decline

Utah's unemployment rate continues to put pressure on small-business owners, though the state's overall economy remains healthy, according to a report released Tuesday by Zions Bank.

The bank's small-business index fell to 113.4 in April from a revised 115.7 in March.

The index measures business conditions from the viewpoint of the Utah small-business owner or manager. It uses 100 for calendar year 1997 as its base and includes revisions to various historical or forecast components as they become available. A higher figure is associated with favorable business conditions.

"The big change was unemployment at 3.4 percent (in Utah), which was down sharply from 3.8 percent in the prior month," said Jeff Thredgold, economic consultant to Zions Bank and head of Thredgold Economic Associates.

Unemployment is the most heavily weighted component of the index. The current rate is much lower than the jobless rate of 4.3 percent during the same month a year ago. A lower Utah unemployment rate is a negative contributor to the index because it implies that business owners will have fewer workers available to hire.

"We're kind of getting back to that period in the second half of the 1990s where we averaged 3.5 percent from 1995-1999," Thredgold said. "That's a level that's good news in terms of those people seeking work, because there's plenty of opportunities.

"But at the same time, it gets real tough for companies to find bodies to hire, especially for smaller businesses. The lower the unemployment rate goes, the more pressure it puts on small employers to fill key positions and to keep them from going somewhere else."

Job creation, on the other hand, saw one of the strongest annualized gains in more than a decade, adding 48,000 jobs over the past 12 months, according to the Zions report.

"Job growth was just a little bit weaker but still very powerful," Thredgold said, adding his belief that the current rate of job creation is sustainable, at least "for a while."

"We've still got a solid natural (population) increase and a rapidly growing labor force," he said. "Net in-migration is strong — the bodies are coming in, and they're being absorbed into the economy quickly. The economy is still running on all eight cylinders."

Earlier this month, the U.S. Labor Department reported that the national unemployment rate was 4.7 percent in April. Employers added 138,000 jobs in April, the smallest increase since October 2005.

---

E-mail: jnii@desnews.com