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[November 20, 2009]

Utah jobless rate comes in lower

Nov 20, 2009 (Standard-Examiner - McClatchy-Tribune Information Services via COMTEX) -- SALT LAKE CITY -- Utah unemployment numbers released Thursday are lower than anticipated, but that will probably change in a final analysis.

While Utah usually has lower unemployment than the national average, the gap between the two is larger than it's ever been at 3.7 percent, with Utah at 6.5 percent versus 10.2 percent nationally, said Mark Knold, senior economist for the Department of Workforce Services.

That difference is likely overstated, Knold said, and when a year-end analysis is done the gap will probably be smaller. Utah lost nearly 41,000 jobs since this time last year, a decrease of 3.3 percent.

Unemployment rates are calculated from a model involving household surveys, current unemployment benefits, population growth and historical factors.

Those historical factors are giving the rates a slightly more positive skew than they should have, Knold said. There is such a history of good economic performance in Utah, the model that calculates the rates doesn't believe the bad numbers it's seeing.

"We think the model is having trouble with how rapidly it (the recession) came upon us," he said.

"It's not uncommon to have a gap, but a gap of this size is the biggest we've seen," he said. "If the rest of the country was having a bad economic time and we weren't, I wouldn't have trouble with that gap, but that doesn't line up with the job losses. We're not doing better than the nation economically. We're suffering just as much." Utahns should expect to see continued job losses in construction, but those losses are shifting from residential to nonresidential construction.

Knold said the economic downturn started in late 2007 when a housing boom fell apart. Nonresidential construction was still necessary to put in infrastructure and services for the new homes.

Now that side of the industry is slowing down too.

The housing construction market has bottomed out, Knold said, but commercial construction still has jobs to lose, although those losses won't be as heavy because the industry isn't as large as housing.

The leisure and hospitality industries are the other hardhit areas in job loss. If Utah has a better ski season, Knold said, that would help bolster the industry.

And there is hope that consumer spending on luxuries like holiday gifts and recreation is coming back.

To see more of the Standard-Examiner, or to subscribe to the newspaper, go to http://www.standard.net. Copyright (c) 2009, Standard-Examiner, Ogden, Utah Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

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