The Utah Department of Workforce Services released their monthly economic update on Thursday. Utah’s unemployment rate stayed steady in the month of December at 3.5 percent, that’s 2 percent below the national level. Job growth was above average for December at 3.9 percent.
DWS Senior Economist Mark Knold said Utah’s unemployment levels have been holding steady for about a year now, as the state continues to recover from the recession. But he cautions that the low unemployment rate could come at a cost.
“When you do have low unemployment rates and you have them for a long time, that basically means that for employers getting labor, it’s getting harder and harder for them to do that and they may not be able to expand their operations as quickly as they want to,” Knold said. “In a long-term situation, very low unemployment rates sometimes can slow down the job growth unless you can have in-migration coming from outside of the state to keep the job growth machine going at the pace that it is going.”
Knold said Utah employees haven’t yet seen the wage hikes that usually come with low unemployment numbers.
“One thing that usually does go along with low unemployment is increasing wage rates and we haven’t seen those yet to this point, but I think that’s just a little bit of a lag and a hangover that is still continuing from the Great Recession,” Knold said.
Dropping oil prices are another economic factor to watch, Knold said. The prices will be beneficial to most Utahns, with the savings at the pump acting like a tax break, though it will not be a positive change for all.
“There are parts within the economy that are going to see some setbacks from this, and that would be the oil producing portion of the economy out in the Uintah Basin, maybe some of the trucking jobs that might go along with that, but for the majority of the state it’s a positive situation,” Knold said.
For a link to the full economic report, click here.