Unemployment is approching historic lows of the late 1990's

How low can it go?

Utah's jobless rate crept lower again in March, approaching the historic lows of the late 1990s, according to figures released Tuesday by the state's Department of Workforce Services. At 3.4 percent, March's rate was nearly a full percentage point lower than Utah saw in the same month of 2005 and 0.4 percentage point lower than February 2006's revised 3.8 percent.

"Obviously, there's a bottom to it," said Mark Knold, senior economist with the department. "You can only go so far. If we were going to use an environment to gauge it, it'd probably be the late 1990s, when we hit 3 percent, or maybe even 2.9 percent."

In the last 12 months, Utah has added about 48,500 new jobs, a growth rate of 4.3 percent, the department reported. By comparison, the U.S. economy added 2.1 million new jobs since March 2005, at a growth rate of 1.6 percent, according to the U.S. Labor Department. The national unemployment rate was 4.7 percent in March.

Utah's professional and business services sector again led the pack, adding 11,400 jobs during the year-over period. Construction ranked a strong second, adding 9,100 jobs, followed by the trade, transportation and utilities sector, which added 7,900 jobs during the last 12 months.

"Utah's employment picture is currently very bright," Knold wrote in the March report. "Jobs are expanding at a rate above our long-term average of 3.3 percent, and there appears to be sustainability in the fundamentals that allowed us to arrive at this point.

"Population gains, joined with pent-up demand that developed in the first half of this decade, have propelled us to our current situation. Continued population gains have the ability to sustain us for several more years, especially if the overall U.S. economy remains on a positive footing."

Utah's economy is in a good growth pattern, Knold said, and the future — at least from the present vantage point — looks like it will continue strong.

"I don't see anything to really knock us off this pattern," he said. Not even gas prices, which soared again this week.

"Last year was the first we saw that kind of run-up, and we anticipated it'd do something to the economy, and it didn't," Knold said. "It never really developed last year, and I'm not sure that it will this year.

"I think what gets us through these things is that we anticipate, or we realize, that these increases are probably just six-month run-ups because of the summer — gas prices always go up during the summer, and we anticipate they'll come back down in the fall. So, we're probably in a 'ride it out' mentality."

Still, there's only so much give left in Utah's unemployment rate, and Knold said the state could see the end of the decline sometime this year.

"There's not a whole lot lower we're going to go," he said. "It's starting to show in some areas already, particularly in the low-skill, low-pay areas. That's where you're seeing a lot of 'Help Wanted' signs.

"When you get down to these kinds of low rates, you find that workers have the ability, or the environment is such that a lot of jobs are being created and people are moving up the wage chain. So the people who suffer, business-wise, are those who are at the bottom of that wage chain."