Utah’s economy stays strong amid national decline
SALT LAKE CITY — Utah’s economy and labor supply is performing strongly due to its growing population, compared to the national average of decline.
Utah’s nonfarm employment rate for October increased approximately 3.1% across the past 12 months, and the state’s economy added an estimated 50,600 jobs since October 2021, according to the October job report from the Utah Department of Workforce Services.
There are currently about 1,690,000 jobs in Utah with 37,300 Utahns unemployed, and October’s seasonally-adjusted unemployment remains unchanged at 2.1%.
Utah Department of Workforce Services’ chief economist Mark Knold said these rates imply “all labor offering itself for work is being absorbed.”
“The Utah economy continues to be one of the nation’s best performing state economies. Labor markets are tight across the nation, even to the point of restricting growth in many states. But not in Utah,” Knold said. “An unemployment rate of 2.1% does signal that the Utah labor market is extremely tight. Yet the economy continues to grow at a vigorous pace.
“It speaks to both the fortitude and attractiveness of Utah’s economy. Only a strong flow of labor in-migration can support a low unemployment rate economy growing at this pace.”
Private sector employment in Utah recorded a 46,900 job increase in October, an expansion of 3.4%, according to the Department of Workforce Services. Construction, trade, transportation, utilities, education and health services, leisure and hospitality all saw gains in job numbers, but financial activities, professional/business services and other services saw decreases.
“Tourism is a valuable and, in some areas, a vital part of Utah’s economic picture,” Knold said.
Nationally, the unemployment rate for October increased a fifth of a percent to 3.7% where it stands now.
Knold said the U.S. economy expanded to the largest it’s ever been with the surplus of workers from the Baby Boomer generation. Most of those individuals are retiring and exiting the production side of the economy, and they did not birth enough babies to match the number of workers from their generation. This means there is now a decline in labor supply, putting pressure on the economy to get smaller, not larger, Knold said
The time for this labor dearth to impact the United States economy has arrived. The pandemic did not produce the nation’s labor shortage, it just pushed it to the forefront.
-Economist Mark Knold
“The time for this labor dearth to impact the United States economy has arrived,” Knold said. “The pandemic did not produce the nation’s labor shortage, it just pushed it to the forefront.”
The nation’s economy is functioning at the fullest pace that its labor supply can support, but since there is not enough labor to support the existing demand for goods and services, the nation is experiencing labor shortages, he said.
The only way to increase the labor is through international in-migration because the country’s internal demographic supply will not suffice, he said. “In the long run, without large in-migration, downsizing is the nation’s economic destiny.”
Knold said people-driven industries will not be able to support the current level of infrastructure and production as the Baby Boomer generation dies.
“This growing demographic-driven labor shortage is changing the overall national economic dynamic,” Knold said.
Utah, however, is the counter story to the national baby decline, as the population continues to grow. Utah’s labor supply is not dwindling like the nation’s is, Knold said.
“For every Utah Baby Boomer who leaves the economy, there are roughly two young Utah workers available to backfill the void,” Knold said.
Utah is also a net receiver of population from in-migration, which combined with the large internal supply of labor, contributes to Utah’s growing and strong economy, Knold said.
“Utah was fortunate that it is somewhat of an economic island in the midst of this developing national trend,” Knold said. “But Utah’s economy does function within the greater aspects of these national pressures and therefore it is not immune from these new economic pressures.”
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