Job loss in Utah reaches 24,600

By Laura Hancock

Deseret News

Utah lost as many as 24,600 jobs in 2008, and the Utah Department of Workforce Services' chief economist estimates that the state may lose thousands more this year.

Department economist Mark Knold said Tuesday that by the end of the recession, in mid-2009, the state may have lost as many as 30,000 jobs since the downturn began in December 2007.

Knold had previously said that 19,000 jobs would be lost between the end of 2007 and 2009, but job losses may be deeper than originally anticipated, he said.

"I do think the darkest period of the recession we're in is right now," Knold said. "And that will cover the fourth quarter of 2008 and the first and second quarters of 2009, which will take us up to June. In the second half of 2009, we'll stop the bleeding, so to speak."

The department on Tuesday released the U.S. Bureau of Labor Statistics' December employment data for Utah. The state's job growth from December 2007 to December 2008 was minus 1.9 percent, close to the national job growth rate of minus 2 percent. Utah's unemployment rate was 4.3 percent, compared with the national unemployment rate of 7.2 percent.

At the peak of the recession, Knold said, Utah's unemployment rate will reach 5 or 6 percent

Most of the jobs lost in Utah last year were in construction. Between December 2007 and December 2008, 18,300 construction jobs disappeared. In that same time, 5,800 manufacturing jobs were lost and 4,000 jobs in trade, transportation and utilities.

Although the number of education and government jobs continued to grow, the December numbers may not reflect recent cuts in state and local government, and may not be reflected in employment statistics for months, Knold said.

Even so, he believes the Bureau of Labor Statistics' figure of 24,600 jobs lost in Utah may be an overestimate. Typically, the federal government allows states to analyze the data. In December, the bureau asked for Knold's help with crunching the data but not his analysis, and Knold said he ran out of time to do it himself.

Historically, Utah has always had job growth during November and December, when employees are needed for the holiday and ski seasons. "The difference between the October and December (job) numbers range from 3,000 higher and 15,000 higher, depending on the quality of the economy that year," Knold said. "In other words, in bad economies, it can be as much as 3,000 higher. In good economies it's 15,000 higher."

The federal government's December numbers do not account for ski and holiday employment, and Knold wants state legislators, who begin a new session on Monday, to realize the most recent data has that caveat. The federal government revises its data months after it initially releases it, and time will tell whether the December data were correct. Still, Knold believes that if job losses in Utah haven't yet reached 24,600, it will in a few months.

Most economists believe unemployment will stop increasing — and maybe even decrease — in the second half of the year if Congress passes President Barack Obama's economic-stimulus proposals aimed at increasing employment.

"Then, hopefully, we'll start adding jobs from there," Knold said about the second half of 2009. "The best scenario is we don't lose more than 30,000."

E-mail: lhancock@desnews.com