The squeeze continues.

Utah's unemployment rate held at 2.6 percent in December, unchanged from November's unrevised mark, the Utah Department of Workforce Services reported Tuesday. About 34,400 Utahns were unemployed in December, compared to 51,000 in December 2005.

"2006 will go down as a very strong year in the state of Utah economically," said Mark Knold, the department's senior economist. "The underlying characteristic or picture of this current employment expansion is that all industries are adding jobs."

Job growth was 4.7 percent for December, down from November's revised 5 percent. In the last 12 months, the department reported that about 55,700 new jobs were created in the Utah economy.

Comparatively, the U.S. Labor Department reported earlier this month that the unemployment rate was 4.5 percent nationwide. Job growth was 1.4 percent.

Two sectors led the way in Utah. The construction industry added 13,400 jobs during the year-over period, while the professional and business services sector brought on 9,800 more workers during that same time. The trade, transportation and utilities group wasn't far behind, adding 7,800 new jobs, while the education and health sector added 5,500 during the last 12 months.

Though growth is expected to continue in 2007, Knold said it will slow.

"It is now the feeling that for the economy to continue to expand at such a high rate ... it probably won't be able to, because it's running out of workers. It's starved for workers," he said.

The signal, he said, came from the temporary staffing arena.

"Right now, I'm seeing that industry actually in — I don't want to say a sharp slowdown, but there's a visible slowdown in that industry, or at least the amount of workers being hired within that vehicle in the economy. That was the trigger point I was looking for," he said.

"At some point, this economy is going to start showing signs that it is being starved of workers, and the industry I want to watch to see if this is panning out or when this might really be happening is these temporary help or employment services (companies). And I'm starting to see it in the last few months."

As the year progresses, Knold said he expects to see job growth move from 4.7 percent to 4.5 percent and lower.

"The rate of growth in the Utah economy has peaked and has actually started to decelerate," he said. "It's not because the business community doesn't feel good or bullish about Utah or that consumers are closing up their wallets and not spending money. It's more along the lines of the supply of workers being fed into the economy has pretty much reached the limit, and it is actually being now a retarding factor on employment growth or the overall growth rate in the Utah economy, because we're just running out of bodies to fill jobs."

So it will be slower. But Knold wrote in Tuesday's report that it won't feel any slower for Utahns or Utah business owners.

"To the consumer and business on the street, it will feel like no change at all," he wrote. "Jobs will be available, wage growth will continue and labor will remain tight."

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E-mail: jnii@desnews.com