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Utah jobless rate rises, while employment growth slows

Published January 19, 2013 1:55 pm

Economy • But economist says state still enjoys good growth rate.
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Utah's unemployment rate in December inched up a notch and job growth fell back, but the changes were negligible and the economy isn't faltering, the state Department of Workforce Services said Friday.

The jobless rate across the state rose to 5.2 percent last month, up from 5.1 percent in November. The increase was the first since April, when the rate moved to 6 percent from 5.8 in March.

Employment growth slowed to 2.9 percent in the year ending Dec. 31. The rate was down from 3.1 percent in the year ending Nov. 30.

Mark Knold, the department's chief economist, said the 0.1 percentage point rise in the unemployment rate was "decimal dust" that represented no meaningful change. And the decline in the rate of job growth was largely due to wintry weather last month that caused construction to slow down.

"The overall picture that is going on is the same story as the last couple of months, in that we have pretty good job growth that is right around our long-term average, which is 3.1 percent," Knold said.

Forecasters often use payroll employment as a proxy for measuring the economy's health. Rising employment signals growth.

While unemployment rose and job formation slowed, Utah is still doing better than the U.S. Nationally, the unemployment rate was 7.8 percent in December and year-over-year job growth was 1.4 percent.

Utah employers created 35,800 jobs in the latest 12-month period, the department said. Even so, 71,000 Utahns are actively looking for work. Even more are sitting on the sidelines, not convinced that they can find work. The labor force participation rate was 66.1 percent, unchanged from November and well under the pre-recession high of 72 percent.

"The unemployment rate over the long haul is working its way down. But that shouldn't make us unaware that a lot of people have gone off to the labor sidelines in the last four to five years that probably wish to come back to a job at some time," Knold said.

Knold continues to believe that job growth will accelerate to around 4 percent when the home-building season kicks in this spring. That should draw more discouraged workers into the labor market and help drive the unemployment rate even lower.

There is, however, a wild card that could upset Knold's forecast of more economic growth in the state. The bitter presidential campaign, followed by the fiscal cliff fracas, a battle looming over the debt ceiling and the phase-in of President Obama's health care law have undermined business confidence, said Aaron Call, vice president of G&A Partners, a Houston-based human resource outsourcing firm. Call runs the company's western states office in Sandy.

Call hired three people recently to help handle additional work coming in from numerous small and mid-sized employers in Utah who have been adding workers to their payrolls. Hiring was particularly noticeable in the second and third quarters of 2012, but slacked off in the final three months of the year largely because of misgivings about ongoing battles between Congress and the White House, he said.

"The biggest thing right now is there is so much uncertainty, as far as business regulation goes," Call said, adding that many of his clients are declaring that they may hire part-time workers rather than full-time out of concerns that Obamacare will force them to offer government-approved health insurance to their employees or pay new federal taxes for not doing so.

The pace of job creation should pick up "once we get into the summer. But I would project that the first quarter [of 2013] or even the first month or two of the second quarter may be pretty sluggish," Call said.


Twitter: @sltribpaul






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