Jobless rate at record low, labor shortage grows

The tough time Utah employers are having finding qualified employees is getting tougher. As the state’s nation-leading unemployment rate continues to drop, the pool of available workers continues to shrink.

The jobless rate for April was reported at 1.9 percent, an all-time low. The rate is down from 2 percent in March and from 2.5 percent last September. The rate reached 2.5 percent as the COVID-19 pandemic was breaking out in March 2020 and zoomed to over 10 percent briefly in April 2020 as businesses shut down in response to the outbreak. The monthly reports saw new record lows starting last December as Utah recovered and then grew the jobs it lost due to the coronavirus.{mprestriction ids="1,3"}

The national unemployment rate for April was reported at 3.6 percent, unchanged from March.

“Readily available labor is a precious commodity right now,” said Mark Knold, chief economist for the Department of Workforce Services (DWS) in his recorded comments that accompany the monthly jobs report.

But despite the labor shortage, Utah’s economy — as measured by job growth — continues to zoom. The state’s nonfarm payroll employment for April showed an increase of 3.9 percent over the past 12 months, adding a cumulative 62,400 jobs since April 2021. Utah’s current job count stands at 1,664,800, according to the DWS.

“The year has progressed into the springtime and the Utah economy continues on its expansionary path,” said Knold. “The unemployment rate has fallen to a new low of 1.9 percent. The rate has been heading downward all year to date, so the current rate brings us to what we anticipated by this spring season. At 1.9 percent, the question now turns to how low can the unemployment rate go? Nationally, the U.S. economy is not sending troubling signals. But with inflation high and the Federal Reserve Board moving interest rates higher, many economists anticipate the U.S. economy will slow as the year progresses. That seems to be the Fed’s desire to combat the high inflation. If so, this will act as a restraining mechanism upon further lowering of the Utah unemployment rate.”

Knold said aging youth and Beehive State in-migration helps replenish the labor supply while other states struggle with an already mature workforce and net out-migration.

“The strong economy draws in workers. New workers keep the economy strong and growing,” Knold said. “That strength and growth draw in more workers, and the cycle comes entrenched and perpetuates until some exogenous factor rises to interrupt it like a pandemic did for most of 2020.”

Utah’s April private-sector employment recorded a year-over-year expansion of 4.3 percent, an increase of 57,600 jobs. All 10 of Utah’s major private-sector industry groups posted net year-over-year job gains, led by trade, transportation and utilities (up 16,000 jobs); leisure and hospitality (up 11,200 jobs); construction (up 7,700 jobs); and education and health services (up 7,000 jobs).{/mprestriction}