Utah's job growth slows, unemployment rate up
Job growth in Utah slowed in April for the fourth consecutive month and the unemployment rate rose, suggesting the pace of the state's economic recovery is wavering.
Employers created 25,200 jobs in the 12 months ending April 30 for a year-over-year increase of 2.1Â percent, the Utah Department of Workforce Services said Friday, still much higher than the U.S. rate of 1.3 percent.
The pace had reached a post-recession high of 3 percent in December after several months of increases that began in earnest in June. Job growth began to gradually lessen in January and has been ebbing ever since.
The statewide unemployment rate increased to 6 percent last month, two ticks above the March rate of 5.8. Still, the rate is well below that of the same time last year, when it stood at a revised 7Â percent. The level also is well below the U.S. rate of 8.1 percent.
Mark Knold, the department's chief economist, said the latest figures don't hint that the job gains that have been seen for the past year and a half are in danger of stalling.
Rather, "it suggests a holding," Knold said. "I don't think the economy right now is at a point where it's moving backward. But nor is it really at a point where it's accelerating."
Like other economists, Knold is focused less on the unemployment rate than on job growth. In more normal economic times, the unemployment rate is a good measure of the job market's strength and the potential to find work. Because the recession's end produced only a subpar recovery, many unemployed Utahns have simply given up looking for jobs. Because they aren't actively seeking work, they aren't counted, which keeps the rate artificiallylow. On the other hand, the rate can rise when they re-enter the market.
As a result, Knold thinks the rate of job growth is the better gauge of Utah's economy. And from that perspective, the state's job market is still one of the most robust in the country, Knold said. But he added that it probably won't strengthen much more until the U.S. economy improves. Unless that happens, Utah will perform below its long-term capability.
"The [state's] economy has enough strength to give us growth rates here in Utah, whether it's 2 percent or 3Â percent. The potential of the economy is to do much better than that, but it's the economic headwinds [outside Utah] that are holding back the potential."
Despite the slowdown, there were several encouraging signs underscoring the vigor of the job market. Except for the leisure and hospitality industry, all sectors of the economy added jobs in April. Professional and business services led the way with 5,600 new jobs, followed by manufacturing, which added 5,000 jobs to the economy. Even the beleaguered construction sector opened up 1,600 jobs.
At the same time, the size of the labor force inched up 0.2 percent, while the number of employed workers rose 1.3 percent and the count of unemployed fell almost 15 percent.
Software developer Solera Networks is one professional and business services firm that is adding workers almost as fast as it can hire them, despite the vagaries of the economic recovery. The South Jordan-based company added 28 employees last year and plans to hire another 54 this year, CEO Steve Shillingford said.
He said demand from businesses and government agencies for Solera's network security software is mushrooming, thanks to a related acceleration in hacking by cyber-criminals and rival countries.
"Growth in our business, growth in our market has created opportunities domestically and abroad, and we need good people," he said.
The company is hunting for sales, marketing and software engineering candidates. Many of the engineering positions will pay as much as $80,000.
"There is a lot of demand for the talent that we are looking for, and the absolute numbers aren't there," Shillingford said.