Survey data indicate rebounding economy
The finalized employment information for the second half of last year is not available.
But the preliminary information indicates that 2004 will be a breakout year for the state, explains the Utah Department of Workforce services compiles the final employment data.
In 2004, the state showed signs of recovering from the three-year economic doldrums corresponding with the national recession and the aftermath of the downturn nationwide.
Since 1950, Utah's economic performance posted an average 3.3 percent annual job growth until 1997. The past three years were particularly bad for the state. But a new birth of economic expansion started to emerge in 2004 and the survey data for the second half of the year offer encouragement.
During the second half of 2004, monthly year-over employment increases registered at or exceeded Utah's 3.3 percent historical average, indicated workforce services.
The state experienced an employment growth trend throughout 2004 and the expanision surpassed the long-term average in the second half of the year. But high oil prices may negatively impact Utah's economy in 2005.
In the 1970s, the per barrel price of oil started to fluctuate and a national recession followed all sharp spikes.
In the second half of 2004, oil prices jumped 60 percent and the sharp spike could suggest an upcoming national recession. But a national recession does not guarantee a downturn or slowdown in Utah's economy. With the extreme exception of the last national recession, Utah managed to weather the storms and exceed the state's 3.3 percent employmenht growth average in some of the downturns. That could happen again in 2005. Strong internal demographic pressures built up in Utah during the last recession. The pressures may be strong enough to push Utah up and over another national recession, pointed out the department of workforce services.
At the national level, the United States enjoyed a banner economic growth year in 2004 despite soaring oil prices and a slumping dollar. But in 2005, the U.S. is likely to encounter a significant slowdown, according to private economists. Analysts believe that rising interest rates, the lack of additionak tax cuts and the lingering effects of higher energy bills will combine to slow growth in 2005.
However, iimproving labor market conditions and cheaper energy prices led to a sharp increase in a widely watched indicator of consumer confidence in the U.S. economy in December, a good sign for growth heading into the new year. The Conference Board, a New York-based business research group, reported that the index of consumer confidence leapt by nearly 10 points to 102.3 in December, following four months of declines.
Oil prices fell as forecasts of mild U.S. weather prompted traders to take profits from a rally that dded more than 30 percent to the cost of crude last year. In the last trading day of 2004 for U.S. oil, prices were down 74 cents at $42.90 a barrel around $10 higher than the beginning of the year, but nearly $13 below the contract's all-time high of $55.67 on Oct. 25. Oil prices plummetted in the last two months on signs that high fuel costs were beginning to weigh on economic growth.
Reflecting the U.S. technology industry's recovery, venture capital investing concluded 2004 in the first up year since the boom ended in 2000. Venture capitalists plowed an estimated $20 billion into start-up companies last year and the investment upswing nationwide should benefit Utah's high-tech industry, concluded the department of workforce services.