Following a trend seen nationally, Utah's unemployment rate for July remained unchanged from June's revised estimate, according to Ken Jensen, chief economist for the Utah Department of Workforce Services.
Unemployment in Utah was at 3.4 percent in July. About 37,100 Utahns were unemployed that month, which is 4,200 fewer than July 1998 when the rate was 4.0 percent."For the past several months, Utah's labor market has been expanding modestly," Jensen said. "There have been no notable disruptions in the form of layoffs, so the unemployment rate has been low and stable."
Nationally, unemployment stayed the same in July as it was in June at 4.3 percent, nearly the lowest in three decades, according to the Labor Department. While workers, job seekers and labor union leaders are happy about the national figures, some financial analysts are worried that the tight labor market will force the Federal Reserve Board to raise interest rates to fend off inflation.
"The tight labor market is finally starting to result in faster growth in wages and that's of concern to the Federal Reserve," said Paul Kasriel, senior economist with Northern Trust in Chicago. "This seals the fate for a quarter-point increase (in interest rates) when the Fed meets on Aug. 24."
If that were to occur, it would affect short-term borrowing costs for millions of consumers and businesses.
The Fed on June 30 increased the funds rate to 5 percent, the first hike in two years.
Utah's other primary indicator of current labor market conditions is the year-over rate of increase in the number of non-farm jobs, which was 2.5 percent in July 1999. This figure has gone down slightly from the 3.0 percent level where it had remained for the last 10 months of 1998.
Jensen indicated that while this rate of job growth has not been this slow since early 1992, job production seems to be adequate for the supply of available labor.
Between July 1998 and July 1999, Utah's employers created about 25,800 new non-farm jobs.
The private sector in Utah produced 22,600 of these jobs, which represents a 2.6 percent rate of growth.
But it was construction in Utah that led all divisions in the rate of job growth, as it has done for the past 11 months. Since July 1999, construction has produced about 5,000 new jobs, which represents an increase of 6.9 percent.
Although job creation slowed in some industries, construction has taken up the slack, and state officials predict current and pending construction projects will continue the strong demand for construction workers through the end of this year.
While many sectors showed either healthy or modest gains in employment, certain areas have fallen.
Utah's largest industrial division, the service industry, has seen job growth of 3.7 percent, which is about a half point slower than a year ago. However, certain areas within this diverse industry are strong -- computer service and other business services are growing at a nearly 7 percent rate.
In all, the service industry has created 10,500 jobs since July 1998, which is 41 percent of Utah's net job creation.
Utah's trade industry, its second-largest division with nearly one-fourth of the jobs, has seen only 4,200 new jobs in the past 12 months, a growth rate of only 1.7 percent. State officials predict that cutbacks in the Albertson's Food and Drug Centers and American Stores main offices will soon begin showing up in the unemployment data.
The Associated Press contributed to this story.