"We knew construction would be weak this year, but we're just starting to get the real picture of how weak it is," said Mark Knold, chief economist at the Utah Department of Workforce Services, which issued its monthly jobs report Tuesday.

Even with job gains in some other industries, real estate woes have pushed Utah's overall job-creation rate down to 1.4 percent for the year that ended in May, which translates into a gain of about 17,900 jobs in the state over the past year, bringing total employment to nearly 1.3 million.

One upshot of less job growth is that the state's tight labor market should loosen up a bit. Employers who had been struggling to recruit and retain employees are expected to find it easier to attract workers, including teens for seasonal summer jobs. Lagoon amusement park, which each summer faces the daunting task of hiring around 3,000 employees, said recruiting has been tough in years past. "This summer, though, it's been easier, which is good," said David Gray, Lagoon's employee services manager.

That bit of positive impact aside, the state's job numbers pose many challenges. Although the job growth rate is higher than the national average of 0.1 percent, it is down significantly in recent months and from a peak of 5.4 percent in the year that ended in June 2006, when the state's economy added 54,000 jobs.

Just a couple of months ago, Knold had predicted that job growth would fall into the 1 percent range by the end of the year.

He recently revised that estimate to zero - meaning overall the economy would not be adding more jobs year over year - after reviewing real estate data.

On the unemployment side, Utah's rate in May was 3.2 percent, which translates into about 44,200 Utahns who were looking for work. That's up from 35,000 people in May 2007, when unemployment was 2.6 percent, but still well below the national rate, which is at 5.5 percent.

Many of those looking for work in Utah have lost jobs related to residential real estate.

Tighter lending standards put in place after the nation's subprime crisis have made it harder for potential buyers to qualify for a home loan.

And years of home-price increases have put homeownership out of reach of more Utah families.

As a result, home construction levels along the Wasatch Front are at their lowest point in about two decades. That has resulted in job losses - or at the very least prevented jobs from being created - at home-building companies and a variety of related industries such as home loan providers, real estate firms, furniture and home improvement chains, and title companies.

Paul Newton, of Backman Title Services in Murray, said title companies throughout Utah have laid off workers, cut employee pay and working hours, and even shut down some offices to cope with a downturn in business.

"No question, it's a tough time," he said. "Usually this is the time people want to buy and sell homes - they can move their kids into a new school district by fall. But it's just not happening at the same level that it's usually happening."

Newton said he is waiting for any sign of improvement in the residential real estate industry but has yet to see any.

"Until I start seeing first-time homebuyers buying again, I don't think we've hit the bottom."

lesley@sltrib.com