More Utahns working in May, national rate remains the same
|Price Papa Murphy employee Lupin Wright creates a tasty pizza for a hungry Carbon County patron. Utah employment in the food service industry, as well as others, was up in May from April figures.|
Utah's unemployment rate was estimated at 4.5 percent in the latest month, down from the prior month's revised 4.8 percent rate, according to Zions Bank Small Business Index for Utah.
The nation's unemployment rate was 5.6 percent in May - unchanged from April's rate while net U.S. employment rose by a solid 248,000 jobs.
The solid rebound of the Utah economy in recent months is in line with similar improvement of the entire western U.S. economy. All western states are again creating jobs. Stronger western U.S. job creation bodes well for Utah's small business sector.
The west was hit hard by the 2001 recession and by the lackluster job creation pattern that followed a return to U.S. economic growth in November 2001, according to the Index. Western employment was hit hard over the past three years as a result of strong employment concentrations in the "4 Ts" of technology, telecommunication (principally Colorado), travel, and tourism. These sectors suffered sharp employment declines.
Employment measures of the most recent 12-month period now find all western states adding to net employment totals. Job gains in the region have averaged 1.8 percent during this time period (not weighted for population), ranging from a meager but positive 0.6 percent in Colorado and California to a robust 4.6 percent in Nevada.
Employment growth in the west should continue to improve in coming months. Regional performance is a component of the Utah Small Business Index.
The Utah unemployment rate, which is the most heavily weighted component of the Index, was estimated at 4.5 percent in the latest month, down from the prior month's revised 4.8 percent rate. The current 4.5 percent rate compares to a jobless rate of 5.8 percent during the same month one year ago. A lower Utah unemployment rate is a negative contributor to the Index as it implies decreased access to Utah labor.
Utah's unemployment rate averaged 5.6 percent in 2003, 6.1 percent in 2002, and 4.4 percent in 2001. By comparison, the 3.3 percent average during 2000 was one of the lowest annual rates since the early 1950s. These rates compare to an average Utah unemployment rate of 3.5 percent between 1995 and 1999, the Index indicated.
Total Utah employment rose by an estimated 15,400 jobs (up 1.4 percent) over the past 12 months, the strongest gain since 2001. This rise compares to a revised gain of 13,900 jobs in the prior year-over-year period. These totals compare to gains averaging 38,000 new jobs annually during the 1994-2000 period. Stronger job gains, leading to greater income creation and rising retail spending, has a positive impact upon Utah's small businesses and therefore, the Index.
The Index dipped to 99.4 during May 2004 from a revised 100.8 during April 2004. The Index measures business conditions from the viewpoint of the Utah small business owner or manager.
A lower Index number is associated with less favorable business "conditions" for Utah's small businesses. The Index uses 100.0 for calendar year 1997 as its base year. The Index also includes revisions to various historical or forecast components as they become available.
Solid employment gains continued as the U.S. Department of Labor reported a net increase of 248,000 new jobs in May 2004, more than the roughly 220,000 rise expected on Wall Street. Impressive gains in March and April were revised even higher by a total of 74,000 jobs. The U.S. economy has added 1.2 million net new jobs so far in 2004 - the best five-month performance in four years.
The U.S. unemployment rate remained at 5.6 percent in May, unchanged from April's level. By comparison, the jobless rate in June 2003 was 6.3 percent, the highest in nine years, the Index noted.
Job gains were widespread in May, as in the prior two months. The U.S. manufacturing sector added 32,000 jobs, the fourth monthly increase in a row. Gains in manufacturing employment are expected to continue.
Impressive U.S. economic growth suggests that solid employment gains are likely to continue at a rate of about 200,000 jobs a month. Strong job gains should occur even as short-term interest rates begin to rise.