SALT LAKE CITY — Despite the economic challenges brought on by the coronavirus outbreak, Utah is leading the way back to employment stability with the lowest unemployment rate in the country.
The state Department of Workforce Services Friday reported that July’s seasonally adjusted unemployment rate registered at an estimated 4.5%, down from a revised 5.3% the previous month.
Nationally, July unemployment registered at 10.2%.
“July’s employment assessment is a third consecutive month of Utah employment improvement,” according to Mark Knold, chief economist at the Department of Workforce Services. “While the pace of job gains moderated a bit compared to the prior two months, the Utah economy is rebounding with vigor.”
According to DWS, approximately 72,900 Utahns were considered unemployed last month. The. state’s nonfarm payroll employment for July shrunk by an estimated 1.8%, with 27,500 jobs lost compared to the same month last year. Currently, 1,516,800 Utahns are considered gainfully employed.
But Knold stopped short of describing the state economy as strong, “because the job count is still on the negative side of the ledger.”
“In other words, we have fewer people in jobs now than we did this time last year. In a 12-month (analysis), we still have a lot of room to improve,” he said. “We’ve improved a lot. We had that hit the bottom there in April and we’ve had a pretty strong bounce back since then, but the bounce back still has a ways to go before I would say that we have shaken off the effects of COVID completely.”
He said until there is a vaccine, the state’s employment numbers will likely continue lagging a bit behind the position it was in before the pandemic. In the meantime, he noted that there seems to be three tiers of success thus far among various industries.
“The first category would be construction. It didn’t even really slow down at all because of COVID. That’s because it can social distance and still do its job, so to speak,” Knold said. “An example of industries that were hurt but made some bounce back would be the retail trade sectors. The third category would be those leisure and hospitality jobs. Restaurants are open, but they’re not at the levels they were before. Theaters are still shut down. Some of those other kinds of entertainment activities are still shut down. There’s no (Salt Lake) Bees baseball and so on.”
The monthly report showed Utah’s private sector employment for July maintained its positive trajectory with four of 10 groups measured posting net job gains for the month — up from three in June. The biggest gains were in construction, which added 7,900 jobs; trade, transportation and utilities adding 3,900 new positions, followed by financial services bringing on 3,000 new hires. To the contrary, six industry groups posted employment declines, with the largest drops occurring in leisure and hospitality, which lost 30,000 jobs; education and health care, down 6,800 workers; and professional and business services losing 6,200 positions.
Knold said employment will likely remain fairly stable for the next several months, barring a resurgence of COVID-19 or other unforeseen outside influence.
“I think you’re going to start to get some leveling off here at around (4.5%) as we go through the next couple of months,” he said. “Another way of saying it is over the last four months, the unemployment rate improved quickly and dramatically. The job growth rate improved quickly and dramatically. I don’t anticipate over the next couple of months that it will continue to improve dramatically.”
“What I’m anticipating over 2020 and by the end of 2021, if I go back before COVID, I anticipated the economy (would) probably only have grown about 1 1/2% over the two year time period. So in between you have a bit of a roller coaster — you have 2020 and this decline, 2021 looks like you’re getting some strong job growth because you’re comparing it back against COVID (the year before),” Knold explained. “But when you smooth it all out by the end of 2021 (and compare it) against the end of 2019, we probably will only have about 1½% to 2% job growth — for Utah, that’s low.”
“It’s probably not keeping pace with the labor force growth, but we’ll make it up farther down the road. We generally do, but it’s just a matter of sticking with what generally happens (and) having faith in the economy,” he said. “You have to be patient and give it time to get back on its feet and get caught back up.”
U.S. Unemployment rates
- Utah: 4.5%
- Nebraska: 4.8%
- Idaho: 5.0%
- Kentucky: 5.7%
- South Dakota: 6.3%
- Montana: 6.4%
- Iowa: 6.6%
- North Dakota: 6.6%
- Missouri: 6.9%
- Wisconsin: 7.0%