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Utah jobless rate stuck in a rut

Published August 17, 2012 9:39 pm

Labor • Unemployment holds at 6 percent for 4th straight month.
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Utah's unemployment rate in July remained stuck at 6 percent for a fourth successive month, while job growth dipped, the state Department of Workforce Services said Friday.

The statewide jobless rate hasn't budged since April, when it rose moderately from 5.8 percent in March, department figures show. The unemployment rate is the same as where it was at the end of last year.

With hiring tepid, job growth slowed to 2 percent, as employers added 24,500 jobs to their payrolls over the year that ended July 31. In June, the year-over-year pace of growth was 2.6 percent, which produced 32,000 jobs. Over the past half-century, the long-term average rate of job growth in Utah has been 3.1 percent.

"The economy has kind of hit a soft patch. We don't have any momentum," said Mark Knold, the department's chief economist.

Nationally, the jobless rate in July was 8.3 percent, up from 8.2 percent in June and a reflection of weak hiring nationwide.

The number of jobs in the U.S. advanced by 1.4 percent in the year ending July 31, according to the Department of Labor. In June, the year-over-year gain was 1.3 percent.

On Friday, the Labor Department said unemployment rates rose in 44 U.S. states in July, the most states to show a monthly increase in more than three years. Unemployment rates fell in only two states and were unchanged in four, including Utah.

Knold doesn't think the state's labor market will strengthen until the housing market revives, Europe's fiscal crisis is resolved and Congress decides what to do about the "fiscal cliff" approaching at the beginning of next year, when automatic federal spending cuts are supposed to begin and some popular tax cuts will expire.

"In the meantime, we are just waiting for some outside help to push us to a higher level, because we've gone about as far as [Utah] can go without that outside help," he said.

Scott Webb, co-owner and vice president of Webb Audio Visual, said that despite the uncertainties his Salt Lake City-based company is in a mood to hire. Over the past two years, Webb has brought in six or seven employees to serve the requests of his still-cautious clients, who expect the company to provide services that other kinds of companies supplied before the recession hit.

But in a telling turn that underscores why Utah's jobless rate hasn't changed much lately, Webb has increased its use of independent contractors who work intermittently for the company, but aren't on the payroll. The company has more work, but not enough right now to bring the contractors on full time, although over the coming year that should change, Webb said

"I'm hiring a lot more freelance, at least a dozen people who I can keep busy every other week," said Webb, whose firm among things creates company presentations.

On Friday, the Department of Workforce Services said 81,700 people were unemployed in July. Although the number is down more than 10 percent from last year, it's up slightly from June, when the department counted 81,300 people out of work.

Both numbers underestimate the scope of joblessness in Utah. In remarks to the Utah Legislature's economic development task force Thursday, Salt Lake Chamber economist Natalie Gochnour said "tens of thousands more" have either dropped out of the workforce or are underemployed.


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