Utah jobless rate up a smidge
State official says current employment boom is unsustainable
The state's unemployment rate rose to 2.6 percent in November, up from October's 2.5 percent, the state reported Tuesday.
"Statistically, that's absolutely no change whatsoever," said Mark Knold, the department's senior economist. "The number of people unemployed is at historic lows; we've never seen it this low before. There's just this lack of workers out there — the reserve army of the unemployed that are out there to fill jobs that the employer community can fall back on."
About 34,700 Utahns were unemployed in November, compared to 51,800 in November 2005. Total employment — the number of non-farm wage and salaried jobs — rose 4.9 percent for November 2006, compared to October's revised 5.1 percent.
All employment sectors in Utah added new jobs during the past 12 months, Knold reported. The construction industry added the most jobs, 14,500 of them, during the year-over period while the information and "other services" sectors rode the tail end, each adding 1,200 jobs during the past 12 months.
"I do feel that we've reached the top, that there really isn't anywhere we can go now except downward in terms of the growth rate," he said.
The "trigger point, the canary in the coal mine" is in the data about the professional and business services sector, Knold said, which includes information from staffing and temporary placement providers.
"If it's going to happen, if the labor force is going to tighten up, as we anticipate it will, this would be one of the first industries where you'd see it," he said. "And we are starting to see now in those kinds of placement agencies, they're still growing, but instead of 10 percent (growth) it's now slipping back to 7 (percent) and working toward 6 and 5. Here's the beginning signs of what we've been talking about for a while: Yes, it is going at full speed, but it's actually going to slow down."
It's not because the economy is collapsing, or that business has turned bearish about the economy, or that consumers have stopped spending, Knold said. The "constraining factor" is simply that "there are not enough people to fill the seats of those jobs that are being expanded," he said.
"It's just a matter of not being able to find enough labor for the economy to continue to expand at the potential rate it would like to," he said. "Instead, it will moderate at the rate reality allows it to."
That likely means a move from 5 percent job growth back down toward 4 percent in 2007, Knold predicted.
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