Thanks to Utah's unemployment rate remaining at 2.8 percent in December, 1997 will go down in the state's economic history as the lowest annual unemployment since 1952, according to Ken Jensen, chief economist in the Utah Department of Workforce Services.
The 2.8 percent unemployment in December remained unchanged from November. The average annual rate will be 3.2 percent for 1997, he said.About 29,400 Utahns were unemployed in December, a drop from the 33,900 unemployed in December 1996.
Jensen said cutbacks recently announced by major corporations in Utah should have little effect on the unemployment rate. "These events are announced weeks in advance to allow affected workers time to start looking for other work. The laid-off employees are also usually granted severance pay, which will further delay their application for unemployment compensation, so it will be April or May before they begin entering our estimates."
He said an indicator of Utah's economic situation, the year-to-year comparison of the growth in non-farm jobs, stood at 3.9 percent in December, declined only 0.1 percent from the November figure. "This is the first time since November 1992 that the year-over job growth rate has falled below 4 percent, but there is no cause for alarm," Jensen said.
Job growth has been gradually slowing since mid-1996, which is the best the state could have hoped for following three years of rapid expansion, Jensen said. "We are now experiencing sustainable economic growth that does not overly stretch our capacity to provide workers."
Nationally, unemployment rose slightly in December to 4.7 percent, but that wasn't enough to spoil 1997's record as the best year for American job-seekers since 1973.
The average for the year, 4.9 percent, was the best since an identical rate in 1973, the Labor Department said Friday. Unemployment hasn't been lower since 1969, when it was 3.5 percent.
December's seasonally adjusted annual rate of joblessness - up from 4.6 percent in November - still was substantially lower than the rate at the start of the year, 5.3 percent.
Employers added a larger-than-expected 370,000 jobs in December, bringing U.S. payrolls to 123.9 million. That's 3.2 million more than a year earlier, the largest job creation since payrolls grew by 3.9 million jobs in 1994.
Labor markets were so strong last year that for months economists were expecting growth-dampening interest-rate increases from the Federal Reserve, which feared low unemployment would push wages higher, encouraging consumer price inflation.
But except for a single quarter-point increase in March, the rate increases never came. Now, with turmoil in Asia threatening to slash U.S. export sales, the Fed is likely to postpone any rate increase for some time and may need to cut rates later this year.