Virus case surge means rise in Utah's unemployment rate

As Utah employers reacted to the recent jump in reported COVID-19 cases, the state’s unemployment rate, the best in the nation in August, took a turn for the worse in September to 5 percent, up from 4.1 percent in August. The number of jobless Utahns rose by an estimated 16,700 people from August to September, according to Department of Workforce Services numbers. The estimated 82,800 unemployed in September compares to August’s 66,100.

Despite the rise, Utah’s unemployment rate for September remained well under the national average of 7.9 percent.

“Despite what the unemployment rate uptick may construe, Utah’s economic rebound continues,” said Mark Knold, chief economist at the Department of Workforce Services. “Jobs continue working their way back across nearly all industry sectors — some faster than others. The unemployment rate rise, in part, reflects both people expiring their unemployment benefits and becoming aggressive in searching for a job. This increased job-search activity is reflected in the labor force participation rate, as it increased by more than a full percentage point over last month. More people are finding work and more people are looking for work.”

The increase in September’s jobless numbers seemed to coincide with higher reports of COVID-19 cases as Utah schools reopened campuses to students and the virus cases climbed.

Andrew Keinsley, an assistant professor of economics at Weber State University, told the Deseret News the state needs to find a balance between allowing kids to return to schools and freeing parents to work, while also managing COVID-19 outbreaks.

“If they have to start closing down schools again, you have parents who aren’t going to be able to find child care,” Keinsley said. “They’re going to have to stop working. The virus is the core problem with the economy right now. So it is about finding ways that we can mitigate the risk that allow us to get back out there. But again, I feel like a lot of people are just kind of wanting it to just go back to normal, and we have to understand that it’s not going to be exactly the same as what it was before.”

Utah’s nonfarm payroll employment for September dropped by an estimated 0.9 percent since this time last year with 14,800 fewer jobs. Utah’s current employment level stands at 1,559,600.

September private-sector employment recorded a year-over-year decline of -1.3 percent, an improvement above August’s revised -1.8 percent deficit. Four of 10 private-sector major industry groups posted net year-over-year job gains in September. Up were construction (7,500 jobs); trade, transportation and utilities (6,900 jobs); other services (3,300 jobs); and financial activities (2,900 jobs). Those losing ground included leisure and hospitality services (down 24,300 jobs), education and health services (5,200 jobs) and professional and business services (4,500 jobs).