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SALT LAKE CITY — Utah's December employment report is reflective of an economy that is holding its own and continually adding jobs.
At the same time, it has also moderated as the year has gone on.
The Utah Department of Workforce Services' December employment summary revealed that the state's nonfarm payroll employment for December increased an estimated 1.7% across the past 12 months, with the state's economy adding a cumulative 28,900 jobs over the same period, bringing Utah's current job count to 1,734,700.
"That's a level (1.7%) over a full percentage point below the 3.2% that the year started with in January of 2023," said Mark Knold, Utah Department of Workforce Services' chief economist.
Additionally, December's seasonally adjusted unemployment rate grew slightly to 2.8%, with approximately 50,900 Utahns unemployed. This is almost a full percentage point below the national unemployment rate of 3.7%.
Utah's unemployment rate, Knold said, "speaks to a fully employed labor market, where labor is hard to find and there is not a generous amount of idle, available workers."
So, why has Utah's employment growth slowed throughout 2023?
"The COVID-19 pandemic's economic disruption, which spurred strong economic growth because the economy needed to get caught up from it, well, it's finally run its full recovery course in 2023," Knold said.
Typically, Utah's economic trends track closely with the nation's — just at a higher level — as was the case for most of 2023.
But now, Utah's job growth has slowed to the point that its position relative to U.S. job growth is the same.
Knold said this can be put into perspective by taking a step back and looking at the big picture. He used an analogy of a spinning top to explain this trend.
"The top was spinning steadily and evenly, but then the strike to the top (the pandemic) transforms it into a wildly oscillating spin. It is still spinning, but it is wobbling back and forth somewhat dramatically," Knold said. "With time, as the top maintains its spin; it starts to realign itself. The wobbles calm down and, with further time, the wobbles stop and the top returns to its pre-strike spin of evenness and balance."
This metaphor is illustrative of what has happened to Utah's economy over the past three years in the COVID-19 environment, evident by some industries regaining their footing and adding jobs — in some cases adding even more jobs than before.
Knold added that throughout 2023, the industries that lagged the most in the wake of pandemic-driven disruptions were those in the leisure and hospitality sector, health care and government.
However, in 2023 those three industries added the most jobs, signifying their bounce back.
"With internal excess labor in very short supply — as manifested by a 2.8% unemployment rate — the fuel needed to crank the Utah economy back up to its higher potential finds itself facing a hefty barrier," Knold said.
"The moral of the story is that the Utah economy will function below its potential in 2024," he continued. "Not because it is an economy that is ailing or unhealthy, but because it is an economy that is being undernourished by external restrictions upon its labor supply."
December's full employment summary can be found on the Utah Department of Workforce Services website.
