Small-business index up despite job losses

Even though Utah shed more than 52,000 jobs in the past year, a new report sees signs that the recession may be ending.

For the month of August, the Zions Bank Small Business Index for Utah showed the state's estimated unemployment rate at 6.0 percent, compared with 5.7 percent in the prior month.

Still, the index moved ahead slightly to 69.9 in August, up from a revised 69.0 in July.

The index measures business conditions from the viewpoint of the Utah small-business owner or manager. A higher figure is associated with more-favorable conditions for Utah's small businesses.

The index uses 100.0 for calendar year 1997 as its base year, and it also includes revisions to various historical and new forecast components as they become available, according to report co-author Kendall Oliphant, vice president of Thredgold Economic Associates.

The current state unemployment rate of 6.0 percent — the most heavily weighted component of the index — compares with a 3.4 percent rate during the same period last year.

Ironically, a higher Utah jobless rate is a positive contributor to the index as it implies increased access to Utah labor. But the overall impact of job losses on the economy is quite negative, he noted.

"You need a return to employment growth, to job growth … because job growth creates greater income levels and stimulates (the economy)," Oliphant told the Deseret News.

From a historical perspective, Utah's unemployment rate averaged 3.4 percent during 2008, 2.7 percent in 2007, 3.0 percent in 2006, 4.1 percent in 2005 and 4.9 percent during the 2000-2004 period. Those rates compare to an average Utah unemployment rate of 3.5 percent between 1995 and 1999, the report said.

The U.S. unemployment rate hit a 26-year high of 9.7 percent in August, up from 9.4 percent in July. The 9.7 percent jobless rate is up significantly from the 6.2 percent rate of one year ago. The average hourly wage rose six cents to $18.65, an increase of 2.6 percent during the past 12 months.

The national economy has now lost 6.93 million jobs since the "Great Recession" began in December 2007, with more than half of the losses during the first eight months of 2009, Oliphant stated in the report.

Despite all the seemingly bad employment data, Oliphant said that some positive signs show better economic times are on the horizon.

"Consumer confidence is rising, the stock market is rising, but probably most significantly is the fact the measure of gross domestic product is … expected to turn positive in the current quarter," he said. "When the GDP grows, that means the economy is growing."

While the Rocky Mountain states have been hit hard during the recession, Oliphant said the Beehive State has fared reasonably well during the recent economic turmoil.

"From what we can tell so far," he said, "Utah has weathered the storm better than some of its neighbors."

e-mail: jlee@desnews.com