Kristin Murphy, KSL

Utah unemployment rate rises in September, reporting more than 80,000 out of work

By Daedan Olander, KSL | Posted - Oct. 16, 2020 at 8:09 p.m.



SALT LAKE CITY — The number of Utahns who are unemployed rose by an estimated 16,700 people from August to September, according to the Department of Workforce Services.

Utah's seasonally-adjusted unemployment rate increased in September to an estimated 5%, according to the numbers released Friday, leaving approximately 82,800 Utahns unemployed.

Both figures are up from August, during which the unemployment rate was at 4.1% and an estimated 66,100 Utahns were unemployed.

"The unemployment rate rise, in part, reflects both people expiring their unemployment benefits and becoming aggressive in searching for a job," Mark Knold, chief economist at the Department of Workforce Services, said in a news release. "This increased job-search activity is reflected in the labor force participation rate, as it increased by more than a full percentage point over last month. More people are finding work and more people are looking for work."

The increase in September's unemployment numbers also coincided with high numbers of COVID-19 cases as many Utah schools reopened campuses to students this fall and struggled to contain the virus.

Andrew Keinsley, an assistant professor of economics at Weber State University, said the state needs to find a balance between allowing kids to return to schools — thus freeing parents to work — while also managing COVID-19 cases.

"If they have to start closing down schools again, you have parents who aren't going to be able to find child care," he said. "They're going to have to stop working. The virus is the core problem with the economy right now. So it is about finding ways that we can mitigate the risk that allow us to get back out there. But again, I feel like a lot of people are just kind of wanting it to just go back to normal, and we have to understand that it's not going to be exactly the same as what it was before."

He emphasized adjusting to a new normal — one that includes following Centers for Disease Control and Prevention guidelines.

"It's just going to be different," he said. "It's going to be more socially distant. It's going to be more Zoom meetings than boardroom meetings. It's going to be talking to people through a mask."

The Beehive State's unemployment rate for September remained well under the national average of 7.9%, which could be due to multiple factors, Keinsley said.

"If you look at the unemployment rate before the pandemic, so if you go back to like February, Utah was in a better situation than the U.S.," he said. "So going into this, we were just in a much better situation. We had a fuller head of steam going into this recession. But at the same time, if you look at the demographics, there's still a big manufacturing presence here. We have a very highly educated workforce; it is also a younger workforce."

Utah's relatively young, healthy population has made the transition to working from home easier and causes the symptoms of the virus to be less serious, generally, Keinsley said.

Utah's private sector saw a 1.3% year-over decline in employment in September. It is lower than the year-over decline in August, which was revised to be 1.8%.

"Despite what the unemployment rate uptick may construe, Utah's economic rebound continues," Knold said. "Jobs continue working their way back across nearly all industry sectors; some faster than others."

Compared to September 2019, 6 of the 10 major private industries in Utah reported year-over job declines in September 2020. The three most "impactful" were in leisure and hospitality services, which lost 24,300 jobs; education and health services, which lost 5,200 jobs; and professional and business services, which lost 4,500 jobs.

"This is very much a services-oriented recession that we're seeing right now," he said. "Leisure and hospitality lost 24,300 jobs ... leisure and hospitality is still getting hammered by this crisis. That one jumped off the page at me."

The four private industries that reported net year-over job increases were construction, which added 7,500 jobs; trade, transportation and utilities, which added 6,900 jobs; other services, 3,300 jobs; and financial activities reported adding 2,900 jobs.

Overall, Utah experienced a year-over decline in nonfarm payroll employment of 0.9%, while the U.S. reported a 6.4% decline. In total, there are 14,800 fewer jobs in Utah in September than there were last year.

"We started to see this in some other, at least national level numbers, where the recovery's starting to lose some steam," Keinsley said. "In terms of what I expect to see, it really could go a variety of different ways, but cautiously optimistic, I think, is what I would call myself — in terms of hopefully people taking this seriously and trying to mitigate the risk as much as possible."

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