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Utah's job-creation rate downshifted in October and altered a key sector of the employment landscape, but that didn't prevent the state from out distancing all others in the race for economic prosperity.
Even with the state's job-growth rate moderating from 4.4 percent in September to 4.3 percent last month, Utah remains far and away the best economically performing state in the nation, said Mark Knold, senior labor market economist with the Utah Department of Workforce Services.
"The only real area of weakness we're seeing is in the residential sector of the construction industry," Knold said Tuesday. "And that isn't a problem of too few people wanting to buy new homes, but more the result of the mortgage lenders getting skittish about the loans they're willing to make."
The result, though, is that construction no longer is the leading job-growth industry in the state.
The trade, transportation and utilities sector surged to the top spot last month, Knold said. And its growth was largely based on the strength of the trade sector, which represents the retail and wholesale arms of the state's economy.
The trade sector added 11,300 jobs over the past year, while construction growth slowed to 10,700 new jobs. "It's not so much a case of trade employment surging, but of construction growth slowing," Knold said.
The Utah State Tax Commission is reporting that $453.9 million was collected in sales tax during July, August and September - the first three months of the state's fiscal year - for a slight 0.32 percent decline from the same period a year ago.
But Knold pointed out that retail trade, which is the primary industry that captures the spending of consumers, is naturally positioned for growth as a result of the expanding state population and the growth in the number of Utah households.
The flip side of Utah's job-growth figures - the unemployment rate - also reflects the strength of the state's economy.
Utah's figure is a low 2.8 percent, compared with the national unemployment rate of 4.7 percent. Still, that 2.8 percent represented a slight increase in the number of Utahns without jobs - 37,700 in October, compared with 35,000 in October 2006.
Kelly Matthews, executive vice president and economist for Wells Fargo Bank, agreed that Utah's employment picture is the best of all the states.
Although he expects the pace of job growth to continue to slow to around 3.9 percent during the first six months of next year, he believes Utah will continue to lead the nation.
"If we can hold on to 3.8 or 3.9 percent job growth next year while at the same time the national GDP [gross domestic product] weakens, it will represent real good economic performance for the state," Matthews said.
Knold described the expected decline as the "inevitable" consequence of the state's strong performance of the past several years.
"It is difficult to maintain a high growth rate for extended periods because you constantly have to add higher amounts of employment growth just to equal the percentage of job creation from the previous year."
Creighton University professor of economics Ernie P. Goss, who tracks the economies of Utah and other Western states, said if he had to wager on the economic performance of any state next year, his money would be on Utah.
"Utah's job growth might be slowing a little, but it is still a heck of a lot stronger than anywhere else in the country," Goss said.