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Utah jobless rate falls for 3rd straight month, but rising COVID-19 cases cloud horizon, economist warns

Beehive State records second lowest unemployment rate in nation for June

SHARE Utah jobless rate falls for 3rd straight month, but rising COVID-19 cases cloud horizon, economist warns

The Utah Department of Workforce Services in Salt Lake City is pictured on Thursday, July 16, 2020.

Kristin Murphy, Deseret News

SALT LAKE CITY — More Utahns are going back to work as the state’s jobless rate falls for the third straight month.

But a local economist warns that until the state and nation get a handle on rising COVID-19 cases, any further recovery could falter.

The state Department of Workforce Services reported Friday that Utah’s seasonally adjusted unemployment rate for June is estimated at 5.1% — the second lowest in the nation. Data indicated that approximately 85,700 Utahns remained unemployed but actively looking for work. The state’s jobless rate for May was revised up a tenth of a percentage point to 8.6%.

Nationally, the unemployment rate for June fell to 11.1%; it was 13.3% in May.

Andrew Keinsley, assistant professor of economics in the Goddard School of Business and Economics at Weber State University, said if the state is able to control the spread of the virus in the next couple of months, then a sustained economic recovery is attainable.

“The underlying issue is the virus itself that leads to uncertainty. People are more worried about going out, they’re worried about catching the virus, we’re talking about opening up schools and the like, there’s a lot of uncertainty out there,” according to Keinsley. “That’s going to be problematic, that could make this kind of stall where we’re at.”

Whatever steps are taken against the pandemic, they need to be long lasting, he said.

“If ... when the school year rolls around (and) we get a huge spike in cases, we might have to start pulling back on the reins a little bit on the reopening,” Keinsley said. “So it’s really uncertain at this point (and) it depends on whether people are wearing masks (and) what kind of precautions people are taking.”

He noted that civic leaders need to take an overarching approach at addressing the health concerns brought on by the pandemic, along with tackling the economic impacts as well.

“It’s all about balance and just the manner of finding that balance,” Keinsley said. “The recent surge in cases has really increased the risk to public health and changes that balance. If we can get this back under control, then we can put people back in schools (and) we can open up restaurants as long as we keep that public health threat in check.”

He said wearing face coverings in public spaces can be a strong tool in the fight to protect the public and reignite the economy.

“The whole point of wearing the mask is to mitigate the health risk so that you can go out, you can go back to work, you can send kids to school (and) you can do all of this (social activity),” he said, adding that statewide recovery will require cooperation from all sectors of the Utah community.

On a macro level, economic theory suggests a jobless rate of 5% would be considered “full employment.” However, that maxim would generally apply to the country rather than an individual state, Keinsley said.

A basic definition of full employment is essentially that nobody is unemployed because the economy is in trouble, he said.

“There are always going to be some people just moving from one job to another. They might quit, they might just be bad at their job, but they’re moving from one job to another,” he said. “There are also some people who get displaced by, say, automation and they need to update their skills. So there’s going to be some people out there who are going to be unemployed, it’s just a matter of whether or not they’re unemployed because there are problems in the economy.”

He said Utah’s highly educated workforce lends itself to building a strong, stable jobs sector that is typically the foundation to a robust economy. While the nation at-large can struggle to bounce back, the state’s solid economic fundamentals help it recover more quickly, he said.

Department of Workforce Services reported three of 10 private-sector major industry groups measured posted net job gains in June, including construction adding 9,700 jobs; trade, transportation and utilities adding 1,400 jobs; and financial activities bringing on 600 new positions. The remaining industry groups shed jobs, with leisure and hospitality services cutting 32,400 jobs; professional and business services down 8,400 positions and manufacturing losing 1,900 jobs.

Nonfarm jobs for June shrunk by an estimated 2.8% compared to last year, with 43,100 jobs lost. The number of Utahns with jobs stood at 1,515,200, with the state’s May year-over-year job change revised down two-tenths of a percentage point to -5.0%.

“June’s employment assessment continues building upon May’s improvement,” said DWS chief economist Mark Knold. “Businesses continue to bring back furloughed workers. Across the past two months, just under half of the COVID-idled workers have been returned to work. These gains, in turn, have cut the unemployment rate in half in two months.”

Nevertheless, the Weber State professor says the state is not in calm waters just yet.

“It’s always about the virus. So keep an eye on the case counts, trying the simpler mitigation things like wearing a mask and social distancing,” Keinsley said. “We’re not going to get back to normal until we have a vaccine. But if we can have these smaller changes to our lifestyles, we can find that balance between (safeguarding) public health and the economy.”


Lowest unemployment rates in U.S.

1.  Kentucky: 4.3%

2.  Utah: 5.1%

3.  Idaho: 5.6%

4.  North Dakota:  6.1%

5.  Maine:  6.6%

5.  Oklahoma:  6.6%

7.  Nebraska:  6.7%

8.  Montana:  7.1%

9.  South Dakota:  7.2%

10.  Alabama:  7.5%

10.  Kansas:  7.5%

Source: bls.gov/news.release/laus.toc.htm