More steady Utah job growth, but worry looms
Labor » Unemployment rate falls as sequestration impact surfaces.
By Paul Beebe
| The Salt Lake Tribune
First Published May 17 2013 09:43 am
Last Updated Dec 07 2013 11:32 pm
Unemployment fell again last month as job numbers increased — but a whiff of sequestration may have tempered what still was more evidence that Utah’s labor market is in a period of stable expansion.
The statewide jobless rate fell to 4.7 percent from 4.9 percent in March as the number of unemployed people actively seeking work fell to 64,000 last month from a revised 67,900 the month before, the Department of Workforce Services said Friday.
Employment increased 3.5 percent from April 2012 to last month as employers added 43,100 jobs. Although the increase was above Utah’s long-term average of 3.1 percent and was the second-largest in the U.S. — North Dakota, in the midst of an energy boom, posted a 3.7 percent year-over-year gain — it was below the 4 percent pace set in February and March.
"We see a lot of positive signs" of stable expansion, said Carrie Mayne, the department’s chief economist. "The one thing that is of concern, that is different from the story that we have been telling for several months, is we are seeing [the first hint of] sequestration."
Mayne said federal employment in Utah fell 4.2 percent in April to 34,500 from 36,000 employees a year earlier. That steep decline pulled down overall job growth by 0.5 percentage points. If Congress and the White House don’t reach a spending agreement soon, federal budget cuts will begin to affect the private sector, as well, she said.
Utah’s unemployment rate has fallen steadily since February 2010, when it stood at 8.2 percent. Over the ensuing three years, Workforce Services economists consistently pinned the decline on discouraged workers leaving the labor force — if someone isn’t actively looking for a job, he or she isn’t counted as unemployed. But on Friday, for the first time, Mayne said the jobless rate fell in April because the number of people finding work is rising faster than the labor force is growing.
"This drop is not because of people leaving the labor force; it really is people getting employed," she said.
The trade, transportation and utilities sector of the economy added 11,000 workers from April 2012 to last month — one-quarter of all jobs created in the year. The professional and business services sector, and the leisure and hospitality sector were second and third, with 8,100 and 7,000 new jobs, respectively.
Manufacturing, which over time has slowly become less prominent in the Utah economy, added 3,400 jobs, a 2.9 percent gain. In part, that’s because Xi3, a 3-year-old builder of modular computers, is well on its way toward hiring 500 people within five years, CEO Jason Sullivan said.
The Salt Lake City-based company has added 63 people to its payroll since June; it expects to hire another 70 people by the end of this year if sales don’t slow down, Sullivan said.
"We are still a private company, so we are not releasing sales figures right now. But I can tell you we are on a very fast ‘hockey stick’ type of growth curve," he said.
The company’s sales focus has been on government and business clients. Later this year, though, Xi3 will introduce its first retail product, a gaming console that will be different than Sony’s PlayStation or Microsoft’s Xbox lines. Instead of inserting discs into a console, gamers will download games from the Internet and play them on television screens.
The new hires will support the roll-out of the new Xi3 product, Sullivan said.