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Utah jobless rate inches up 0.2%

Utah's unemployment rate inched up 0.2 percent in May to 3.2 percent, a full percentage point below the national average for the month.

Ken Jensen, chief economist for the Utah Department of Workforce Services, said the state's jobless rate moved very little from last November through March, drifting back and forth in a narrow range of 3.2 percent to 3.4 percent.April's drop to 3.0 percent seemed to herald a breakout, but with the return in May to 3.2 "we're back on familiar ground," Jensen said.

The figure means that some 35,900 Utahns were out of work last month, down from 41,300 in May 1998, when the unemployment rate was at 3.9 percent.

The number of nonfarm jobs created in May was up 2.7 percent over the same month in 1998 but is essentially unchanged so far in 1999, Jensen said. The growth rate hasn't been this slow since 1992, but he said it "seems adequate" for the present.

Over the last 12 months, Utah's 60,000 employers have created some 27,400 net new nonfarm jobs, 25,400 of which came from the private sector and the remaining 2,000 from government, a low 1.1 percent rise in those jobs.

Nationally, the Labor Department reported Friday that May's 4.2 percent unemployment rate, down 0.1 percent from April to the lowest it has been since 1970, came despite the smallest growth in U.S. payroll jobs in three years.

Unemployment among blacks last month was the lowest ever recorded.

The decline in unemployment was surprising since it came in the face of continued massive job declines in the manufacturing sector, which lost 45,000 positions last month. A total of 453,000 factory jobs have disappeared since March 1998.

Nevertheless, the overall national economy remains strong, propped up by low interest rates that have boosted sales of homes and consumer products.

The stock markets have been nervous lately, but traders seemed to take Friday's unemployment news as a positive sign. In early trading Friday the Dow Jones industrial average was up 52 points at 10,716.

Although the Federal Reserve did not change interest rates at its last meeting May 18, the policy board said it is "leaning" toward raising rates in coming months if inflationary pressures increase.

Economists told the Associated Press Friday the May report offered mixed signals about where the economy is headed. While the unemployment rate fell, the number of payroll jobs created nationally totaled only 11,000, the smallest increase since a decline in January 1996.

Some analysts said the small gain in payroll jobs may reflect that employers are having trouble finding qualified people in the current tight labor market. Other analysts noted that while May's increase in jobs was tiny, the April figure had been revised up sharply to show a sizable gain of 343,000 jobs.