Utah’s slowly declining unemployment claims a sign of broader economic recovery

Thousands of Utahns remain out of work due to the pandemic, but steady improvements in the job market and other economic indicators in several new reports paint the state as the envy of the country.

For a third consecutive week, more than 6,000 Utahns dropped their jobless claims and stopped collecting benefits, a sign they have returned to work. That exceeded the number of new claims filed during the week ending Aug. 22, at 5,628, the state Department of Workforce Services said Thursday.

Ongoing claims from Utahns persistently sidelined by the health crisis are now at 60,773, the department reported — the lowest level since early May.

Christopher Cherrington | The Salt Lake Tribune

New weekly U.S. unemployment filings, meanwhile, inched above 1 million again last week and a total of 14.5 million American continued to draw jobless aid, according to the Labor Department.

The national unemployment rate was estimated at 9.9% last week, while Utah’s rate stood at about half that, or 4.5%, as of the end of July.

That gap is just one of several indications Utah is on a solid path to economic recovery in contrast to other parts of the country. A report issued this week by Gov. Gary Herbert’s Office of Management and Budget credits the state’s approach on reactivating its economy in the face of COVID-19.

“With the launch and ongoing momentum of key components of Utah’s recovery and revitalization plan, Utahns can look optimistically toward the continuation of further economic improvement in coming months,” analysts wrote.

That positive trend, the report said, began when the governor moved the state’s restriction levels from red to orange in early May and has been bolstered by further easing of health guidelines and business reactivation since then. The state also saw coronavirus cases and deaths rise dramatically during that time, leading hospital administrators to warn about being overrun with patients.

That rise in new COVID-19 cases have since tempered. But analysts for Herbert said that while the state is faring better than the rest of the U.S., continued action to both support the economy and protect public health “remains essential to accelerate economic recovery.”

A complex state-by-state index measuring economic activity, published by the Federal Reserve Bank of Philadelphia, convey an even sharper contrast. Utah and Arkansas were the only states to enjoy any improvements for June in that hybrid score, which is based on payrolls, jobless rates, employer income and other factors.

Utah saw its number leap by 3% over a three-month period ending in June, compared to 0.6% for Arkansas — and double-digit declines in the score for all but a few U.S. states.

Massachusetts, for example, saw its index plunged by 41.3% in that same time period, while scores for Michigan and West Virginia fell by around 28.5%. The country as a whole saw that three-month measure drop by an average of 5% for June, according to Federal Reserve data.

The index for July shows more widespread improvements across the U.S., although with Utah still among a handful of states leading the way.

Some of Utah’s industries hardest hit by the pandemic have had jobless claims drop significantly in recent weeks, the report from Herbert’s economic analysts noted, with health care and retail trade showing some of the greatest improvements.

Also seeing significant recovery, it said, are Utah’s accommodation and food services sectors — hotels, restaurants and bars — although workers laid off or furloughed from those industries still account for about 15.8% of all state unemployment claims.

Across 21 major employment sectors, nearly 75% of Utah workers currently out of a job say they are furloughed, with some prospect of returning to their former workplace. And for those who lost wages due to COVID-19 in sectors such as hospitality, food and arts, entertainment and recreation, that share is above 86%.

And in another sign of Utah’s improving path, the report noted that taxable sales in the state, including online sales, grew by 8.3% in May and 8.0% in June, after flattening in March and April. Those trends, however, obscure major declines for some industries.

Taxable sales in June for accommodations, arts and entertainment, clothing, restaurants and personal care remained well below their levels this same time last year. Sectors such as home furnishings; sports goods, music and books; motor vehicles; home improvement supplies; and grocery stores, on the other hand, saw their June sales grow.