News / Utah / 
A workstation at the Department of Workforce Services
in Midvale is pictured on Thursday, Feb. 25, 2021.

Annie Barker, Deseret News

Utah unemployment rate fell to 3.1% in January

By Jasen Lee, Deseret News | Updated - Mar. 3, 2021 at 2:35 p.m. | Posted - Mar. 3, 2021 at 11:34 a.m.



SALT LAKE CITY — The number of people without jobs continues to fall in the Beehive State, even though the overall number of people working is lower compared to the same time last year.

The state Department of Workforce Services reported Wednesday the seasonally adjusted unemployment rate for January was 3.1%, with approximately 50,100 Utahns considered unemployed. The December unemployment rate was revised downward to 3.3%. Nationally, the U.S. jobless rate decreased to 6.3%.

Data indicated that Utah's nonfarm payroll for January declined half-a-percent over the past 12 months, with 7,700 fewer jobs since January of last year. The state's current employment level registered at 1,549,100.

"The winter months have decelerated but not stopped the Utah economic recovery," said DWS chief economist Mark Knold. "With end-of-year adjustments, December's employment estimate has been scaled back and the January estimates reflect a slight improvement over the revised December numbers.

"Yet private-sector employment has returned to employment expansion," he said. "It is government employment that is curbing the overall picture, in particular, education employment."

Private sector employment for the month showed a slight improvement year-over-year expanding by 0.3%. Five of Utah's 10 private-sector major industry groups posted net gains over the past 12 months, led by professional and business services adding 9,900 new jobs; trade, transportation and utilities producing 8,100 new positions; and financial activities adding 4,100 jobs.

"The industry currently leading the Utah economy is professional and technical services. These are generally high-paying, high-knowledge jobs (that) include computer systems, programming, engineering and consulting services," Knold said. "These activities and the resultant vibrant payrolls helped to spur further spending throughout Utah's economy."

He said even with the economy under COVID-19 restrictions, retail sales in Utah are brisk and so is the resultant employment in retail establishments. He said transportation is another vibrant industry with sizeable employment gains in courier services, with the trucking industry showing resilience as well, along with financial activities also faring well spurred by a favorable stock market, Utah housing market and resultant mortgage financing.

"Utah's improving economy is also keeping Utah's homebuilding activities brisk," Knold said. "Last year was a record year for approved dwelling units in Utah, even with that the housing market supply still seems to be chasing the demand — an issue that began back in the Great Recession, and still has not caught up to the demand."

Contrarily, five industry groups saw year-over-year declines in employment, with leisure and hospitality losing 12,400 positions; education and health care decreasing by 7,600 jobs; and information cutting 1,500 positions.

"There are industry sectors that are waiting for a revival. The most pressing is the leisure and hospitality sector, which includes restaurants, hotels, arts, entertainment and recreation. The common theme here is the activities they sell are centered around dense customer interaction and with COVID putting trepidation around that this industry remains waiting for COVID restrictions to be overcome," he said. "That time seems to be getting closer and with the issuance of vaccines, the light at the end of the tunnel shines a little bit brighter each day. The hope is that by the latter part of this year, this industry will be seeing the revival that it's looking for."

Despite job losses in other sectors as well, Utah continues on its path of economic recovery from the COVID-19 pandemic, Knold said.

"The recovery's pace in January was not as robust as it was in the summer and fall months. There is somewhat of a winter pause setting in, and that seems to be the response to increase COVID-19 cases during that time," he said. "Nonetheless, Utah's economic trajectory remains toward repair and expansion, and the economy's potential remains positive."

The winter slowdown is something economists anticipated.

"The state's January unemployment rate is measured at a relatively low 3.1%. Most of that low measurement is the result of reemployment across the past nine months, but some of it also reflects discouraged workers exiting the labor force," Knold said. "That was not much of an issue, and not much of a contributor to a falling unemployment rate until this winter slowing set in."

He noted that the discouragement still does not rival what the state and nation experienced during the Great Recession. He said some labor force discouragement is expected to remain in place until the spring months accelerate into summer when both the social outlook and the economy will likely improve.

Knold said Utah's economy is currently operating in what he described as "the job count Mendoza line — the divide between job growth and job contraction — in other words, the zero line."

"Utah's economy is almost at the balance point between growth and contraction, and so is the job distribution between the major industry groups — about half are growing and half are trying to get back to growth," he said.

Jasen Lee

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