Utah's job growth stalled at 0.3 percent in August, the lowest monthly employment growth rate since August 2003, the Department of Workforce Services said Tuesday.
The state's unemployment rate, meanwhile, increased to 3.7 percent in August, up from 3.5 percent in July. The biggest gouge came in the construction industry, which lost 14,400 jobs in August, compared with a year earlier a 13.2 percent drop.
The outlook for a turnaround could be a year away at best, said Mark Knold, chief economist for the Utah Department of Workforce Services.
"I'm seeing that industry dropping down to about a 22,000 job loss before it is all said and done," he said in an interview. The losses would probably come from the non-residential construction sectors rather than residential, which he said "had already taken a beating."
He believes that commercial and industrial construction will likely begin to slow down by next year.
Besides construction, the financial-services sector lost 1,100 jobs in Utah in August, compared with August of last year, according to the report.
Knold said the finance industry has only recently has begun to see large numbers of job losses, but there may be more to come in the wake of the demise in recent months of finance and investment giants, Bear Stearns, and the crises this week with Merrill Lynch and Lehman Brothers. Utah could lose about 3,000 jobs in the financial sector, Knold said.
In August, Utah employers added just over 3,200 jobs. The nearly flat growth rate is an important indicator of the "powerful negative external economic pressures" weighing on the state's economy, Knold said. "We're just vulnerable to that flow and influence."
He worries that the current economic situation that is developing nationally is reminiscent of what occurred in the 1930s, when problems in the financial sector helped spawn the Great Depression.
But for now, Utah has continued to outperform the national average in job growth. Nationally, the number of available jobs decreased 0.3 percent in August. The national unemployment rate rose 0.4 percent in August to 6.1 percent.Even so, the number of Utahns without jobs has increased significantly since last summer, with approximately 50,600 Utahns considered unemployed in August 2008, compared with 37,800 last August, the report said.