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SALT LAKE CITY -- Utah's jobless rate held steady at 4.7 percent in July, but energy prices are likely to continue to hammer at the state's economy, according to one economist.
The Utah Department of Workforce Services reported Tuesday that the state's unemployment rate for July was unchanged from June's unrevised 4.7 percent. About 57,800 Utahns were jobless last month, compared to 63,400 during the same month in 2004.
Total employment, the year-over change in the number of nonfarm wage and salaried jobs, was up 3.5 percent in July, which the department reported was "a slight upward movement from the growth rates observed over the past several months."
"I like what I'm seeing so far," said Mark Knold, senior economist at the department. "The economy is still growing. We're holding our own in that 3.5 percent range. We lost some momentum earlier in the year, but I think that was kind of a stomach punch from the high energy prices."
Since July 2004, Utah has added about 37,900 new jobs, and the department reported employment expansion across the board. The professional and business services sector added 8,800 new jobs in the year-over period, followed by the construction industry, which brought on 6,700 new workers. The trade, transportation and utilities sector added 6,500 new jobs, while education and health added 4,300. Slower growth was reported by the natural resources sector, which added 500 workers during the last 12 months.
Earlier this month, the U.S. Labor Department reported that the national unemployment rate held steady at 5 percent in July, and employers added 207,000 jobs during the month.
Looking ahead, Knold said energy prices will continue to be the major risk factor that could hamper further growth. "In fact," he said, "I think that prices are going to have to go even higher."
The supply of crude oil continues to struggle to keep up with demand, Knold said, a problem compounded by recent troubles reported by domestic refineries. Demand — both domestically and from emerging economies in China and India — has not been significantly curbed by rising prices, which means they will continue to climb, Knold said.
The per-barrel price for crude oil topped $67 in the past week, and on Tuesday the government reported that gasoline prices jumped 6.1 percent in July.
The U.S. Energy Department said Monday that gasoline prices have risen to an average of $2.55 for a gallon of regular unleaded, nearly 68 cents higher than July 2004.
Whether the higher prices will send the economy skidding is an open question. Knold said he doubted gas prices will be enough to cause a recession. But even if they do, Knold said, "it doesn't have to translate to a Utah downturn. There have been (energy-related) national recessions before, and Utah has ridden right over it."
However, Knold warned, "building our growth rate even higher is probably a hard thing to do in the face of what's coming, and that's higher prices."
(Copyright 2005 Deseret Morning News)
