Another 4,500 Utahns lost jobs last month, increasing the state's unemployment rate to 6.5 percent in October.

While that is as high as the rate has been since April of 1987, the Utah Department of Workforce Services' chief economist said Thursday there is some underlying hope within the latest monthly jobless numbers.

"The economy is much better now than four to six months ago," said Mark Knold. "We feel it has stabilized, found a bottom."

Still, the number of out-of-work Utahns climbed in October to roughly 88,900, an 84 percent increase in the 13 months since the financial system's collapse compelled many employers to cut costs by laying off workers

October's job losses translated into a 0.3 percent rise in the unemployment rate from September. And it means there are 41,400 fewer jobs in Utah now than in October of 2008, the first month of the sharp downturn.

But pointing to figures for various sectors of the economy from this year compared to last year, Knold noted that most are showing smaller declines than in past months.

For instance, the heavily hit construction sector had 15.8 percent fewer jobs last month than in October of 2008. But in September, the drop from a year earlier was 17.7 percent.

Similarly, the number of professional and business services jobs last month was down 4.8 percent from a year earlier. The September-to-September comparison was a negative 6.5 percent.

"You don't go from negative 6.5 percent job growth to zero to positive 6.5 percent in two months. There's a transition period," Knold said. "That's what we're seeing across the board -- transitioning out of the depths of the downturn into an area of neutrality before going into the positive range. We're moving through that transition period."

At this point, he expects Utah's economy to start adding jobs in the first half of 2010. While acknowledging it is possible the economy cannot sustain the recovery once federal stimulus funding is exhausted, delaying job growth by perhaps a year, Knold added "that's not the scenario we're giving the highest probability to."

Part of his optimism is based on reports of "tepid job gains" by companies that supply temporary workers.

"We use that as a front-line gauge of the economy," Knold said. "Employers use that temporary staff to fill immediate needs, as a cushion while they wait to be convinced that an uptick in business has legs underneath it ... Four months or so of that and businesses often are more prone to hire for themselves rather than using temporaries."

But like the erratic nature of the economy itself, not all Utah temporary service firms have been busier lately.

At Fillerup Employment Services Inc. in South Salt Lake, manager Brody White said "we've been consistently slow for the last little while. We haven't been doing a whole lot better."

Utah's current unemployment rate remains far below the national average -- 10.2 percent. And if Knold's positive perspective plays out, the depth of the current downturn will pale compared to conditions in the 1980s, the last time joblessness was a major problem in the state.

Between April of 1980 and August of 1985, Utah had 65 consecutive months in which the unemployment rate exceeded 6 percent. It peaked at 9.7 percent in March of 1983.

From that nadir, Utah's employment situation steadily improved for 24 years, climaxing with a jobless rate of just 2.4 percent in February and March of 2007.

mikeg@sltrib.com