Unemployed Utahns got some very uplifting news Thursday — the statewide jobless rate should continue downward in 2013 and the already vigorous pace of job growth of the past year is expected to pick up speed, putting thousands back to work.
“Average annual employment in 2012 grew 3.2 percent. That was 39,000 jobs,” said Juliette Tennert, chief economist at Gov. Gary Herbert’s Office of Planning and Budget. “We actually expect this pace to accelerate to 3.5 percent, or 44,000 jobs” in 2013, well above the long-term average of 3.1 percent.
In her remarks to more than 350 people who attended a state-of-the-economy review presented by the Salt Lake Chamber and the Wasatch Front Economic Forum, Tennert said the statewide unemployment rate, which averaged 5.7 percent of the labor force in 2012, probably will descend to 5.4 percent in 2013.
That is still relatively high, compared with pre-recession norms. Before the downturn started in 2007, Utah’s monthly jobless rate was often below 3 percent. Tennert said the average rate isn’t likely to fall below 5.4 percent this year because thousands of discouraged workers who left the labor market during the recession aren’t counted as unemployed given that they aren’t actively looking for work. When they return, they will be counted until they find work. That will have the effect of slowing the decline of the unemployment rate, or even causing it to rise.
Unlike in recent years, there is a noticeable certainty in the outlook for 2013 that Utah’s economy is moving toward normal times. Tennert said the state has gained back virtually all of the 90,000 jobs that were lost during the recession, although by other estimates not all jobs might be at the same rate of pay as before.
“I’m very pleased to report to you today that we are just about to reach peak employment again. From the trough [of the recession] to the current level, we have gained 88,000 of those 90,000 jobs back. So we are well on our way to recovery,” she said.
Tennert’s assertion echoed a similar claim Lane Beattie, the chamber’s CEO, made as he opened the economic review Thursday.
“Utah’s growth is absolutely back” to where it was before the recession, said Battie, whose business group represents 7,400 employers in all parts of the state.
“It’s not all blue sky, but there is a lot of blue sky,” Gov. Herbert said in his remarks. “The statistics tell us that in the past year 39,000 people who didn’t have jobs got up and went to work” Thursday morning. Herbert noted that personal incomes in Utah exceed pre-recession levels and that retail sales are on a par with 2007.
There were misgivings on display, too. All were directed at the ongoing fiscal battles in Washington, D.C., that Herbert and others said have sown widespread uncertainty among businesspeople who are accumulating cash rather than investing it because they don’t have a clear picture about tax and spending policies. That sense of operating in an environment of greater -than-usual-risk will hold back the U.S. economy this year, they said.
“Whatever you see right now is going to be seen in 2013,” said Kelly Matthews, a retired Wells Fargo economist.
Added Natalie Gochnour, the chamber’s chief economist, “ I’m surprised that we had so much difficulty in Washington, D.C. [in 2012] and chose to elect the same government.”
Audience members apparently agreed with the direction of the economy outlined during the review by Tennert and other speakers.
“I think Utah will do fine,” said Jon Abrams, a consulting engineer. “Unemployment is relatively low. People have a good work ethic.”
Doug MacDonald, an economic consultant, said he is optimistic that Utah’s economy will perform well this year. Housing starts will be up sharply when the building season begins this spring. Auto sales will be strong, too, he said.
“Hopefully that will offset any spending cutbacks that the federal government might do,” MacDonald said.
By the numbers: Utah’s economy in 2013
Gov. Gary Herbert’s Office of Planning and Budget released its estimate of job growth and other measures of the economy for this year. The estimates are available online at www.governor.utah.gov/dea.
• Employment growth: 3.5 percent
• Population growth: 1.7 percent
• Unemployment rate: 5.4 percent
• Average pay: up 2.7 percent
• Home prices: up 2.8 percent
• Retail sales: up 6.1 percent