Decreased chance of 'double-dip' recession is good news for Utah small businesses
HomeDecreased chance of 'double-dip' recession is good news for Utah small businesses
By Linda Thomson , Deseret News
SALT LAKE CITY — New employment figures suggest there is less chance that the U.S. will plunge into a "double-dip" recession, and that is good news for small businesses in Utah, according to the Zions Bank Small Business Index issued Tuesday.
Some economists had feared that the country would experience the dreaded "double-dip," meaning that the recession that officially began in 2007 would be followed by a brief period of recovery, but then another recession would hit.
However, the index suggests that scenario "seems unlikely."
New employment data released Sept. 3 shows better-than-expected manufacturing in the country, as well as somewhat heightened consumer confidence, which would point to less of a chance of another economic fall.
The Small Business Index for Utah was 109.4 in August, which is an improvement over a revised 108.3 in July.
The index measures business conditions for small Utah companies, with a ranking of 100 from 1997 as its base. A lower figure means there are less favorable conditions for Utah's small businesses overall.
The state's unemployment rate remained unchanged from July to August, at 7.2 percent. Total employment went up by approximately 17,200 jobs over the past 12 months.
A higher rate of unemployment is a positive factor for the Small Business Index, because it suggests businesses have greater access to workers.
But other factors associated with unemployment, such as fewer jobs being created, lesser income gains and reduced retail sales, have a negative effect on the index.
The U.S. economy continued to lose jobs, with about 54,000 net jobs gone in August. However, that was not as bad as the highly negative expectations for August, which had some economists predicting a loss of 105,000 jobs.
The loss of temporary U.S. Census jobs was the primary reason for the decline. However, the private sector created 67,000 jobs, which exceeded expectations.
The U.S. unemployment rate went up to 9.6 percent in August, which followed two months in which the rate was 9.5 percent. "The increase resulted from an estimated 5500,000 people — presumably more optimistic about finding a job — entering the labor force," according to the Small Business Index report.
The latest national unemployment rate is a slight improvement over the 9.7 percent posted one year ago.
e-mail: lindat@desnews.com