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Weak Utah job growth not cooling things off yet

Published June 21, 2013 12:44 pm

Employment • Even though sequestration hits one key sector in state, recovery chugs on.
This is an archived article that was published on sltrib.com in 2013, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Utah's unemployment rate continued to drift lower in May, but the rate at which employers created jobs slowed notably as the effects of federal sequestration continued to kick in.

The statewide jobless rate fell to 4.6 percent last month from 4.7 percent in April, the state Department of Workforce Services said Friday. The rate is at its lowest level this year and has been under 5 percent since February.

There was a cloud over the report, though. Government employment in the year ending in May fell 2.3 percent, with that sector acting as a drag on overall job growth in Utah. Statewide, employment grew just 2.6 percent in May, compared with the same month of 2012, as 32,600 jobs were added to the economy. By comparison, April's rate was 3.5 percent, with 43,100 jobs added.

The year-over-year rate of job growth was the slowest since October, when the pace was 2.3 percent. Over the long term, the rate of growth across the state has averaged 3.1 percent. Even so, Utah's economy hasn't hit a rough spot, economists said.

"In a strong expansion such as Utah has been experiencing the past year, some months will be slower than average and some months will be faster than average," said Juliette Tennert, chief economist at the Governor's Office of Management and Budget.

Carrie Mayne, the Workforce Services department's top economist, focuses on long-term patterns. Utah's economy has vigorously outpaced the rest of the country since the Great Recession ended four years ago, so it's not possible to conclude much from one month of slower job growth, she said.

"It's never a smooth trajectory ... we don't expect to continually see higher and higher numbers," Mayne said. Instead, "we tend to focus on trends. So if we see many months of growth, that means the economy is growing. We would have to see many months of [slowing growth] to point to a decline."

Of the 11 job sectors that make up Utah's economy, only government showed real weakness. Led mostly by federal and state agencies, that sector shed 5,200 jobs from May 2012 to last month. Federal employment fell 1.9 percent, with the steepest declines in defense-related jobs. State employment dropped 5.1 percent, mainly because the spring semester at Utah's public colleges and universities ended in a week that was later than last year when classes were still in session.

With the exception of mining, which hasn't added or subtracted jobs in the past year, more people are at work in all remaining nine sectors of the economy. The biggest gainer was in trade, transportation and utilities. Employment in that sector expanded by 10,900 jobs. Professional and business services was second, with 7,400 new jobs.

Spencer Ferguson, CEO of Wasatch I.T. in Murray, which sells computer products and provides information technology outsourcing services to companies, sees nothing that indicates Utah's economy is cooling.

Ferguson thinks the opposite is true. Last year, Wasatch I.T. raked in $4 million in sales; this year the company is on track to reach $5 million. The rapid growth persuaded Ferguson to hire two employees — a salesperson and a computer technician — in April. That expanded his payroll to 20 people. If sales don't slow, the company will take on another four people before the end of the year.

"(Business) is quite competitive in our space, but it's been excellent," Ferguson said.

pbeebe@sltrib.com

Twitter: @sltribpaul