Utah economy continues to crank out new jobs

Utah's economy continues to add jobs at the highest rate in nearly a decade - nearly 39,900 new positions in the year that ended Sept. 30 for a job growth rate of 3.6 percent, according to a report released Tuesday.

Only a few other states can claim higher job-growth numbers so far this year. Jobs are being added in a variety of industries, including construction, education, health services, financial services and hospitality, said Mark Knold, Utah Department of Workforce Services senior economist.

Strong job growth has driven down the state's unemployment rate to 4.6 percent, up slightly from August's unemployment rate of 4.4 percent but down from 5.2 percent in September 2004.

Despite the dampening effects of higher gasoline prices, Utah is "in a good economic position," Knold said.

- Lesley Mitchell

Utahns face little risk of plummeting real estate prices should the nation's "housing bubble" pop, a top Federal Reserve Bank official said Tuesday.

Escalating housing prices in cities nationwide have led many economists - and Federal Reserve chairman Alan Greenspan himself - to speculate that home values are at risk for the same type of correction that plagued the stock market in recent years.

But Utah - and Salt Lake in particular - are "substantially" less vulnerable to a real estate correction than most other parts of the country, said Janet L. Yellen, president and CEO of the Federal Reserve Bank of San Francisco. In recent years, residential real estate in other states has jumped in value while Utah overall has seen little appreciation, Yellen told reporters Tuesday after speaking to business leaders in Salt Lake City.

"Utah is an exception," she said.

Starting late last year, the Wasatch Front's real estate market began to heat up as the state's economic recovery took hold. But residential real estate values in Utah still are rising less rapidly than in other parts of the country, Yellen said.

In the second quarter, home values in Utah rose an average of 9 percent from the same quarter in 2004, according to the Office of Federal Housing Enterprise Oversight, a federal agency that monitors residential real estate appreciation nationwide.

That increase is better than Utah's home-value increase of 2.5 percent from 2003 to 2004 and 2.6 percent increase from 2002 to 2003. But it remains below the national average of 13.4 percent.

Even if housing prices don't plummet, they should level off, experts say, especially as interest rates rise.

While Utahns may be at less risk for a housing bubble, they are equally vulnerable to what Yellen considers to be another major economic threat: Rising energy prices. Prices for natural gas - which most Utahns use to heat their homes in the winter - are expected to escalate. The federal government has predicted that natural gas to heat homes will cost 48 percent more this winter and home fuel oil will be 32 percent higher.

''Natural gas is definitely a problem. If we have a mild to normal winter, we are OK. But if we have a colder winter than normal, we just don't have enough natural gas,'' said David Wyss, chief economist at Standard & Poor's in New York.

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The Associated Press contributed to this article.