Utah's job outlook grim; '09 losses will be worse than in other U.S. areas, economic consultants say

By Lois M. Collins, Deseret News
and Barbara Hagenbaugh and Barbara Hansen, USA TODAY
Published: February 10, 2009

Utah will be among the harder-hit states in terms of job losses in 2009, according to a grim prediction from economic consulting firm Moody's Economy.com, which says every state and 95 percent of the nation's metropolitan areas will end 2009 with fewer jobs than at the year's beginning.

The report says Utah will lose 31,016 — or 2.5 percent — of its jobs. In only 13 states is the projection worse.

The pain exists to some degree everywhere, so people who lose jobs in one state won't simply be able to relocate to find work. That lack of mobility will make it harder to pull out of the downturn, say economists at Moody's Economy.com, Wachovia and others. Education and health services and government are the only sectors expected to add jobs.

The prediction for Utah is "in the ballpark" with local projections, says Mark Knold, chief economist in Utah's Department of Workforce Services. "We have it at about 2.3 percent (of jobs lost) across all sectors, led by construction."

So far, many of the jobs already lost in Utah have come from the housing-construction sector, he says, but that's fallen about as far as the experts believe it will go, with close to 13,000 jobs lost. Not so with non-residential construction, which is expected to be well off the 2007-2008 peak in dollar value, which reached $2.1 billion and is likely this year to be only $1.6 billion.

Utah Gov. Jon Huntsman Jr. has said he wants to see roads projects finished. That would stop some job losses, but will not change the projections, Knold says. And while folks are hoping that a new economic-stimulus plan will jump-start the economy, Knold says the effects won't be felt for at least the next few months.

Things that make a difference quickly don't last long, and those that do take time to be felt. "If you put a lot into rebuilding roads, rail lines and infrastructure things, that takes time to work into the system. But once you do them, they are incredible assets to the economy that give back for years and years and years," he says.

Even if the stimulus package — which contains some tax cuts, money to bolster key government programs like unemployment, Medicaid and Medicare and new jobs building infrastructure — passed this week, Knold says, "it will take a couple of months before it starts to have a ripple effect through the economy. We're living now on decisions made two or three months ago — and no decisions were made then."

Moody Economy.com's chief economist, Mark Zandi, describes the national situation as "nowhere to hide in this economy. If you lose your job, it's not clear where you should move to find one or even what training or education you need to retool yourself," he says. "The hallmark of the current downturn is that it is so broad-based across industries, occupations and regions of this economy."

Workers in some states certainly will be better off than others. Employers in six states — Washington, Texas, North Dakota, Colorado, New Mexico and Nebraska — and Washington, D.C., are expected to shed less than 1 percent of their workers this year.

At the same time, Ohio, Missouri, Florida, Connecticut, Hawaii and Michigan are forecast to lose the greatest proportions of their states' jobs. Michigan, hit hard by a rapid decline in the U.S. automotive industry, is expected to shed more than 175,000 jobs this year, a 4.3 percent decline, according to Moody's Economy.com.

Nationwide, employers are expected to cut 2.7 million jobs this year after eliminating more than 2 million positions in 2008, according to Moody's Economy.com.

The year is already off to a bad start. Firms cut 598,000 jobs in January, the most since 1974, the Labor Department said Friday. The unemployment rate rose to 7.6 percent, the highest in more than 16 years.

The most recent Workforce Service numbers put Utah unemployment at 4.3 percent.

More than 11.6 million people were unemployed last month nationally, up 54 percent from a year earlier and the most since December 1982.

Including people who were working part time even though they wanted full-time work, and those who had given up on finding a job, the rate of "underemployment" was 13.9 percent in January, up from 9 percent a year earlier and the highest since the Labor Department began tracking the number in 1994.

This month isn't looking much better. Already, household names such as Macy's, Electronic Arts and PNC Financial Services have announced thousands more layoffs.

Conference Board chief economist Bart van Ark attributes the uniformity of the downturn to the financial industry's crisis, which has led to tighter or more expensive credit for businesses and consumers no matter where they are located.

E-MAIL: lois@desnews.com
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