Utah continues to lose jobs, but there are signs of recovery

Utah continues to lose jobs, but there are signs of recovery

By Lesley Mitchell, The Salt Lake Tribune
06/19/2009 07:08:06 AM MDT

Could Utah's economy finally be on the mend?

The state job report out Thursday wasn't exactly upbeat. Utah's economy has lost 41,800 jobs -- 3.3 percent of the state's total -- over the past year, pushing unemployment up a bit higher in May.

That said, there are signs that the state's downturn may be bottoming. One of the strongest signs is that initial unemployment insurance claims are beginning to slow, said Mark Knold, Utah Department of Workforce Services economist.

"We are not out of the woods yet, as employment is one of the last areas to recover once the business climate improves, but there is a feeling that the economy is close to turning a corner," he said.

About 74,800 Utahns were unemployed in May, pushing the state's unemployment rate up to 5.4 percent from 5.2 percent in April. Last May, about 45,400 Utahns were out of work when the state's unemployment rate was only 3.3 percent, according to the Utah Department of Workforce Services.

Utah is still faring better than much of the rest of the country -- the U.S. unemployment rate in May reached 9.4 percent -- a 25-year high. Many economists forecast the rate could reach 10 percent by the end of the year.

But on the brighter side, unemployment benefit claims nationally dropped for the first time since January, one indication that the U.S. economy is stabilizing after the worst recession in half a century. Other positive news: The average number of claims over the past four weeks also has fallen to the lowest level in four months.

The same trend is occurring in Utah. Initial unemployment insurance claims, made by those who have just lost jobs, peaked at a weekly rate of about 5,300 in early January. The weekly claims rate remained high -- in the range of 3,000 to 4,000 per week for much of this year. But in the past four weeks, those claims are now down around 2,700, the state said.

"It's still very high. You want to see these down to about 1,000 a week," Knold said. "But the trend is in the right direction."

Any recovery, though, will be very gradual. Knold said Utah's job losses and unemployment rate may still get worse in the coming months. To see those numbers improve, companies have to stop laying off people and start hiring again.

Consumers, strung by the bad economy, aren't going on a spending spree anytime soon. And companies are likely going to be slow to hire new employees.

So when will it happen ?

Conference Board economist Ken Goldstein said if those trends continue, a "slow recovery" should start before the end of the year, but he cautioned that the job market will take longer to rebound. Knold said the same holds true for Utah.

The Associated Press contributed to this story.