Number of Utah jobs shrinks again

Job losses that have been "much steeper and more aggressive" than Utah economic experts had either anticipated or seen before are continuing, according to the July employment summary released Thursday.

And while the losses "could be slowing down as we speak," Mark Knold, Utah Department of Workforce Services economist, said, "it will probably not bottom out until the first half of next year."

The report released by the department and the U.S. Bureau of Labor Statistics showed that Utah's nonfarm wage and salaried job count contracted by 4.2 percent in July, meaning that about 52,600 jobs that were part of Utah's economy last year no longer are. There are now 1,190,300 jobs.

And the seasonally adjusted unemployment rate rose 0.3 of a percentage point to 6 percent in July, with approximately 82,400 Utahns considered out of work. Just a year ago, that number was 47,300.

Nationally, unemployment fell 0.1 percent to 9.4 percent, attributed to people opting out of the labor force at a faster pace than jobs were being lost, the report said.

Knold said job losses are especially striking in three areas: construction, manufacturing and professional and business services. And the hardest-hit metro area in the state is clearly the St. George area, where "Sunbelt" construction woes are weighing heavily on the economy.

In the past year, Utah dropped 16,300 construction jobs, most of them in residential construction, although nonresidential construction is expected to shed more jobs going forward as projects that were under way are finished. Over two years, 31,000 construction jobs were lost.

And Utah was not hit nearly as hard as places like Las Vegas, Southern California and Arizona, the "Sunbelt," where construction was "hyperactive," with the exception of St. George. On a smaller scale, it was home to the same type of overbuilding and speculative activity that about guaranteed it would be hurt when the bubble burst, said Knold, who believes employment numbers there will prove to be "straight-out worse than it shows now."

That area, unlike the rest of the state, he said, has bottomed out. But whether the bottom will be pointed or flat, recovery steep or gradual, is not yet clear.

Recessions always hit manufacturing hard, he said, and this one is no exception: "Even if the fire starts somewhere else, it will go in there real quick." Utah's manufacturing is only at about 65 percent of capacity, so as it picks up, it will be a while before there's a need for more workers.

As for professional and business, which includes telemarketing and temporary staffing, Knold said they're always hit hard and some of the service jobs are actually built that way: low-paying and low-skilled as a "flexibility tool" that's easy to eliminate in down cycles. Those jobs are one of his leading indicators; when they are being created and filled, he'll know the economy has turned a corner.

e-mail: lois@desnews.com