Recession impacting state business index
The national recession has contributed to climbing unemployment rates not only in Utah, but throughout the Rocky Mountain region.
Initially resulting from severe housing sector weakness and a freeze-up of domestic as well as global credit markets, the current recession officially started in December 2007, pointed out economic consultant Jeff Thredgold in the latest Zions Bank small business index report.
The majority of the forecasts suggest the downturn will continue until mid- to late 2009, explained the economic consultant.
However, the pessimistic forecasts predict that the nationwide recession will continue into 2010.
At the state level, Utah's total employment has declined by 2.1 percent for an estimated 26,000 job loss during the last 12 months.
By comparison, Utah added 1,900 positions in the statewide labor force in 2008, 49,600 in 2007, 55,700 in 2006, 43,700 in 2005 and 30,200 in 2004.
On average, Utah's economy managed to create 38,000 jobs annually during the six-year period ranging from 1994 to 2000.
But the state posted a net loss of 1,300 employment opportunities from 2001 through 2003.
Estimated at 5.1 percent in March 2009, Utah's unemployment rate represents the most heavily weighted component of the small business index, noted the economic consultant.
A higher unemployment rate is a positive contributor to the small business index, suggesting greater labor availability for employers.
However, rising unemployment levels suggest weaker job gains or greater labor force losses statewide, lesser income growth and slower retail spending, continued Thredgold.
The factors in question influence the calculations and lead to lower index numbers.
Utah's small business index registered at 70.3 in March.
The index measures business conditions from the viewpoint of the small companies at locations across the state.
Higher numbers are associated with favorable business conditions. The index uses 100 for 1997 as the base calendar year.
At the national level, the U.S. Department of Labor reported a net loss of 663,000 jobs in March, representing the 15th monthly decline in a row.
The nation's economy has lost 5.1 million employment opportunities since the recession began, with nearly two-thirds of the losses occurring within the last five months, noted Thredgold.
The U.S. unemployment rate jumped to 8.5 percent in March, the highest posted in 25 years.
The average wage rose 0.2 percent or three cents to $18.50 per hour, an increase of 3.4 percent during the last 12 months.
The net drop of nearly 3.1 million labor force positions nationwide in 2008 represented the worst year recorded by the United States economy since 1945.
Similar employment decreases are likely to mount in the upcoming months as the United States struggles to combat the worst nationwide recession in the post-World War II period, concluded Thredgold.