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SALT LAKE CITY — Utah employment continues to grow, according to the latest job numbers released Friday. Still, it could be another four to six years before the state's economy "is firing on all cylinders," according to one economist.
In January, the state unemployment rate fell to 5.7 percent from December's 5.8 percent, and total jobs have risen 2.6 percent — 30,300 over a year ago — according to Department of Workforce Services. The overall U.S. unemployment rate was 8.3 percent in January.
The latest numbers show that the recent uptick in Utah's economy "has legs underneath it — it has momentum," said DWS chief economist Mark Knold. "Unfortunately, it might also have a ceiling ... I wouldn't be surprised to see similar numbers in June."
- 80,000 jobs have been lost since 2007
- 25,000 new jobseekers are added to the market each year
- 40,000 construction jobs lost since 2005 peak
- Less than 5,000 construction jobs have been added back
- 2.6% rise in total jobs from beginning of 2011
- 3.1% is Utah's average annual job growth over the last 40 years
That's because the housing sector of Utah's economy continues to lag, Knold said. "We need the housing market to join the party."
The state's housing market is beginning to show positive signs, but may not return to more "acceptable levels" until 2015, said James Wood, director of the Bureau of Economic and Business Research at the University of Utah.
Residential home prices could yet drop another 3 percent to 5 percent this year, Wood noted. While construction employment fell by about 40,000 workers since its 2005 peak, fewer than 5,000 of those jobs have been added back, Wood said.
In the past 12 months, 3,300 constructions jobs have been added to the state economy, according to the jobs report, but those were mostly added in commercial rather than residential construction.
On the bright side, new residential construction statewide could rise to 10,000 this year from 8,700 in 2011, Wood said. And in Salt Lake County sales of existing homes could hit 11,000, outpacing the 9,300 sold in 2011, he added.
In comparison to the 2.6 percent job growth figure, over the past 40 years Utah has averaged an annual growth in jobs of 3.1 percent, Knold noted.
The state lost 80,000 jobs in the economic downturn that began in 2007, and about 25,000 new jobseekers are added to the market each year, Knold said. To fully recover to pre-recession employment levels, the state economy must make up the 80,000 jobs lost, and an additional 25,000 each year, he added.
It's kind of a moving target. It could be multiple years before you employ all the people who want work.
–- Mark Knold, economist
"It's kind of a moving target," Knold said. "It could be multiple years before you employ all the people who want work." That could be as far out as 2016, 2017 or 2018, he added.
Knold compared the nation's long, slow economic recovery to its recovery from the Great Depression in the 1930s. The length of both recoveries may be because the labor market is adjusting to major new technologies — the automobile during the Great Depression, and the computer and Internet today, he said. During the Depression, farmers had to be converted into autoworkers. Today, industrial, manufacturing workers are being converted to technology and information workers.
Gov. Gary Herbert hailed the latest job numbers.
"It's very good news. ... We are certainly moving in the right direction with good momentum," Herbert said. "What we are doing in Utah is working. But our work is not done. We still have too many Utahns who are seeking jobs or underemployed."
In the past 12 months, the professional and business services sector added the most new positions with 6,700, followed by trade and transportation with 5,000, and education and health care with 4,800, according to the report.
The unemployment rate only counts those who are actively seeking work, and does not acccount for those who have given up looking for work or who have returned to school instead. Originally, DWS pegged December's unemployment rate at 6.0 percent, but revised that figure to 5.8 percent, according to the jobs report.