Utah economy on pace to recover jobs lost to downturn
Utah's job engine jumped into high gear in December as employment growth surged to a four-year high, while the jobless rate tumbled to its lowest point in three years.
The number of jobs in the state jumped by 3 percent last month, compared with December 2010, the Utah Department of Workforce Services said Thursday. The growth was the fastest since November 2007, one month before the Great Recession officially started. The rate is also tantalizingly close to the long-term 3.2 percent annual rate of growth that Utah typically generates in good times, which aren't here yet.
"If we continue to move along at this rate of employment growth, about this time next year we will get all of the [80,000] jobs back that we had lost during the downturn," Workforce Services chief economist Mark Knold said.
As the job count rose, the unemployment rate fell to 6 percent, the lowest since January 2009. Just three months ago, the jobless rate in Utah was 7.4 percent. Although the numbers underscore growing certainty that Utah's economy is mending, the rapid decline was attributed to discouraged job seekers leaving the workforce, as well as to job creation.
In fact, the official unemployment rate is far lower than a broader measure of joblessness devised by the U.S. Bureau of Labor Statistics. The unofficial rate is close to 9 percent, when the 80,300 Utahns counted as unemployed are added to estimates of discouraged workers who have given up their job searches and sporadic job seekers moving in and out of the labor force.
Still, the trend of growing numbers of jobs and declines in the state's monthly unemployment rate both which began last summer are meaningful developments as Utah eases into 2012. Underscoring the improvement, first-time applications for unemployment benefits fell by 720, to 3,173, in Utah last week, while the four-week moving average, which smooths out fluctuations, ticked up by only 127, to 3,016.
Nationally, the pace of U.S. job creation in December was 1.3 percent and the jobless rate was 8.5 percent. The number of people seeking unemployment benefits fell by 50,000. The four-week average dropped to 379,000. That's the second-lowest such figure in more than three years.
With the exception of government, all parts of the state economy added workers last month. Leading the way was the professional and business services sector, where many workers earn relatively good wages and salaries. About 11,000 jobs were added in that sector during the 12-month stretch that ended last month. That was 30 percent of the estimated 36,300 jobs created during the period, according to Knold's department.
Mark Newman, chief innovation officer and founder of HireVue, a Draper-based software company, has seen demand for his firm's online job-interview products surge in the past two years. As it landed new customers and as existing clients such as Walmart, Nike and Starbucks have increased their software purchases, HireVue hired 23 engineers, salespeople and other workers in 2011. The 6-year-old company now has 50 people on its payroll and expects to hire up to 40 more by the end of the year.
"HireVue is growing very quickly. We are exceeding our expectations and in fact tripled our revenue in 2011 and are looking to do the same in 2012," Newman said.
Even the beleaguered construction sector, which lost 36,000 jobs after 2007, added workers in December, according to state figures. About 1,600 positions were created over the 12-month period, even as big construction projects such as the huge City Creek retail and residential project in downtown Salt Lake City approach completion.
Given that the U.S. and Utah economies lost so many jobs during the recession and afterward, analysts are far more focused on job creation than the unemployment rate, which provides a skewed picture of the economy. Utah's labor force is smaller today than it was in June, reflecting a widely held view that work is still hard to find.
Strong as job creation was in December, don't look for the growth rate to rise much higher than where it is now until the housing industry bounces back, Knold said.
"You need the whole spectrum of the industrial sectors to be vibrant to get your employment growth up above your long-term average [of 3.2 percent], and we are just not seeing it out of construction because of the sluggish housing market," Knold said.
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The U.S. economy is showing renewed vigor after struggling during much of 2011, and Utah is outpacing the rest of the country. Unemployment is down and the rate of job creation has picked up.
But will it last, and will it be enough to return unemployment rates to pre-recession levels? If you own a business and would be willing to share your hiring plans, we'd like to know whether you expect to add employees, lay off workers or keep things as they are for possible inclusion in a story. Contact reporter Paul Beebe at firstname.lastname@example.org.