Utah Trendlines for Jan/Feb 2010

January/February 2010Perspectives on Utah’s Economyutah's economya look forward & backMeasuring Unemployment: The Saga ContinuesEconomic Insight pg. 10Answer the 2010 Census—Help Your CommunityNational News pg. 12Department of Workforce ServicesTrendlinesTrendlinesUtah Department of Workforce Servicesis published every other month by the Utah Department of Workforce Services, Executive DirectorWorkforce Development and Information Kristen CoxDivision. To read, download, or print this publication (free), see our Internet Workforce Development and site: http://jobs.utah.gov/wi. Click on Information Stephen Maas, Director“Publications” then select the one you want Stacey Joos, Assistant Directorfrom the list. Kimberley Bartel, EditorTo obtain additional printed copies or to subscribe to Trendlines contact:ContributorsMark KnoldDepartment of Workforce ServicesJohn MathewsAttn: WDIDJohn Krantz140 East 300 SouthJim RobsonSalt Lake City, UT 84111Lecia LangstonLinda Marling ChurchCarrie MayneTelephone: (801) 526-9462Fax: (801) 526-9238CoordinationEmail: wipublications@utah.govConnie BlaineThe Workforce Development and DesignerPat SwensonInformation Division generates accurate, timely, and understandable data and analyses to provide knowledge of ever-changing workforce environments that support sound planning and decision-making.jobs.utah.govDWS-03-44-0110Equal Opportunity Employer/ProgramAuxiliary aids and services are available upon request to individuals with disabilities by calling (801) 526-9240. Individuals with speech and/or hearing impairments may call the Relay Utah by dialing 711. Spanish Relay Utah: 1-888-346-3162.2 January/February 2010January/February 2010Perspectives on Utah’s Economycontentsutah's economya look forward & backPutting Government Employment in 5PerspectiveWasatch Front and StatewideMeasuring Unemployment: The Saga ContinuesEconomic Insight pg. 10Oil and Gas in Utah: Answer the 2010 Census—Help Your Community6Boom, Bust & BeyondNational News pg. 12The OutlookDepartment of Workforce Services 8Looking Back at 2009Economic NewsMeasuring Unemployment: 10The Saga ContinuesA Look Forward Economic Insightand BackAnswer the 2010 Census—Help Your 12CommunityNational News14Looking Toward 2010What's Happening16American Community SurveyInsider Newspg. 818Police Officer: Maintaining OrderOccupations21Garfield CountyCounty HighlightLooking for Work in an22Economic DownturnOur Guestpg. 12The Movers and Shakers: Who Moved into 24Cache & Washington Counties in 2008?The Outskirts27Just the Facts...Rate Updatejobs.utah.gov/wiTrendlines 3wasatch front and statewide | by mark knold, chief economist Just over half of al government employment in Utah is found at theThe biggest employer within local government is the local sc holocoad lg lsior tvc iers tn.menel tve.lDid You Know...•Alliant Techsystems (ATK) •The growing ranks of the •Like a year ago, employers said it has been awarded a unemployed have drained the in Utah seem reluctant to contract to supply small-caliber budget of a state-administered pad their payrolls this holiday ammunition worth $93 million. program that provides new-season with part-time workers. http://www.sltrib.com/business/job training. http://www.sltrib.http://www.sltrib.com/business/ci_13748293com/business/ci_13818957ci_138533194 January/February 2010Putting Government Employment inJust over half of al government employment in Utah is found at the olGovernment is currently one of in Utah, the population has been 2008, with two-thirds of this growth only three industries in Utah growing at a much faster rate than can coming within the higher education that is showing year-over em-be seen in total government growth. system. In the face of constrained bud-ployment growth. The others are From 2003 through 2008, Utah’s gets, state government employment chealthcare and private-sector educa-population has grown by 14.3 percent, has contracted over the past year by ag ltion. This has been the case over the while government employment has 1.1 percent. This has happened in the olast year, as all other industries have grown by 7.7 percent. Three years ago, face of a noticeable increase in higher vexperienced some sort of employment when Utah’s economy was booming, education enrollments over the past ercontraction since October 2008, with government was the slowest growing of year. It is the conundrum of economic nmconstruction, manufacturing, and fi-all Utah industries. It is quite common downturns that state budgets feel the enancial services experiencing contrac-during good economic times for pinch of declining revenues, while ntions more along the lines of the past government to be one of the slowest many workers idled by the recession e l ttwo years.growing industries.use the down time to take advantage veof the higher education system to fur-. lGovernment is comprised of three Just over half of all government em- ther their skills and education. There branches—federal, state, and local. All ployment in Utah is found at the local is commonly an inverse relationship can be classified and quantified with government level. The biggest employer between the health of the economy, employment, individually or in aggre-within the local government sphere is and the level of higher education en-gate. Government in aggregate makes the local school districts. Local govern- rollment.up around 18.2 percent of all Utah em-ment employment has grown by 10.3 ployment, making it the second larg-percent between 2003 and 2008, with The federal government makes up est employment sector (and generally most of this growth driven by increas- about 17 percent of all government in most other states also) behind retail ing numbers of young Utah children employment in Utah. Federal govern-trade. This is up from 17.2 percent just aging their way into the K-6 education ment employment in Utah has actually two years ago, but it is not so much system. contracted by 1 percent between 2003 that government is growing beyond its and 2008. Recently though, with much normal proportions. Instead, it is more Most of the growth in government re-federal stimulus money in the mix, fed-a matter of other industries losing jobs, corded over the past year (during the eral government employment in Utah thus causing their percentage of total economic downturn) has been at the has grown by nearly 4 percent over the employment to shrink, which makes local government level. Local govern-past year.government look bigger.ment employment has expanded by 1.9 percent over the past year.Both federal and local government em-Government has not grown beyond ployment levels have helped to add its proportions. Its customer base State government employment has new jobs to the Utah economy over the is largely the Utah population, and grown by 8.5 percent between 2003 and past year. jobs.utah.gov/wiTrendlines 5the outlook | by john krantz, economist Oil and Gas in Utah: Boom, Bust, & BeyondAs oil and gas production expanded, so did employment in the industry. What does the future hold for the oil and gas industry in Utah?Utah’s oil and gas industry occupies an interesting commodities, which includes oil. Together these factors position within the country’s industry as a raised oil prices and stimulated domestic oil and gas whole. In 2007, Utah ranked 16th in total energy production. production, 13th in crude oil production, and 8th in natural gas production among the fifty states. However As oil and gas production expanded, so did employment impressive these ranking may appear, Utah only produces in the industry. Total oil and gas employment in Utah 1.5 percent of the total energy, 1 percent of the total crude increased by more than 25 percent in the first 10 months oil, and 1.9 percent of the total natural gas in the United of 2008 reaching a peak of 7,367 in October (see graphs).States. While the quantities of oil and gas produced in Utah are relatively small when viewed from the national In the summer of 2008 the prices of oil and natural gas perspective, the industry is regionally important.began to fall, which would signal a reversal in the oil and gas industry’s fortunes. Why did prices fall? The full In Duchesne and Uintah counties, employment in the oil impact of the current recession was only beginning to be and gas industry accounts for between 15 to 20 percent of felt in the second half of 2008. Subsequently, demand for total employment. Moreover, the oil and gas produced is oil in the U.S. alone dropped by 10 percent and worldwide important to the neighboring states of Colorado, Idaho, demand softened amidst the global recession. The dollar Nevada, and Wyoming. Utah produced a total of 1,087 also began to strengthen in the middle of 2008, implying trillion BTUs of energy and consumed only 806 trillion a lower dollar price for foreign oil. The dramatic drop in BTUs in 2007, which left 25 percent of total energy output oil and gas prices led to an equally dramatic drop in Utah’s available for sale to these nearby states. For eastern Utah employment. In the eight months following October and the surrounding states, Utah’s oil and gas industry is 2008, employment in the Utah oil and gas industry fell by of considerable significance.more than 33 percent to 5,850 in June 2009 (see graphs).The oil and gas industry can be volatile, exhibiting What does the future hold for the oil and gas industry alternating periods of booms and busts. From 2000 in Utah? While booms and busts are the nature of the to the end of 2008, the industry in Utah experienced a industry, there might be reason for optimism concerning nearly continuous boom. The steady rise in both oil and the near future. The recent weakening of the dollar and natural gas prices stimulated expansion in the industry, rising world demand has started to push up oil and natural but what explains the rise in prices? Four main factors gas prices. The decline in oil and gas employment slowed operating in concert brought about the price increase. down from April to June of this year indicating, perhaps, First, international demand for oil was growing rapidly, the bottom of the trough. Furthermore, the Energy particularly in China, India, and the Middle East. Second, Information Administration short-term projections for oil world production lagged behind the higher level of and natural gas prices show upward trends through June demand. Third, a relatively weak U.S. dollar meant that of 2010 (see graphs). Taken as a whole, the indicators each dollar purchased a smaller quantity of foreign oil. suggest that employment in Utah’s oil and gas industry And fourth, general disappointment in the performance should stabilize and could begin to rise again before the of the stock market led investors to shift their funds to end of 2009. 6 January/February 2010Oil Prices and Employment in the Oil and Gas Industry in Utah8,000140t 7,000120ymen 6,000100el)mplo 5,00080y E 4,000il (per barr603,000as Industre of O402,000Pric1,00020Oil and G00Jan 08ar 08ar 09ar 10May 08Jul 08Sep 08Nov 08ay 09ay 10MJan 09MJul 09Sep 09Nov 09MJan 10MMOil and Gas Industry EmploymentPrice of Oil per BarrelNatural Gas Prices and Employment in the Oil and Gas Industry in Utah8,00018t167,000as 14ymen 6,000al G12tur5,000mploeet)10y Eubic f4,000e of Na8ric3,0006(per 1,000 cas Industrtial P2,00041,0002ResidenOil and G00Jan 08ar 08ar 09ar 10May 08Jul 08Sep 08Nov 08ay 09ay 10MJan 09MJul 09Sep 09Nov 09MJan 10MMOil and Gas Industry EmploymentPrice of Oil per BarrelSources: Utah Department of Workforce Services; Energy Information Administration.jobs.utah.gov/wiTrendlines 7economic news | by mark knold, chief economistLooking Back at2009The immediate repercussions of the downturn are just now beginning to ease, but the longer-term effects are yet to transpire.Economically, 2009 was a very capitalism’s heart and soul, its financial quarter of 2008. So the worst (nadir) rough year for the state of Utah. markets. History shows that when the month for over-the-year job loss might It will be marked as Utah’s worst financial markets suffer severe shocks, be August, when just over 71,000 fewer year of job loss in the post-World War it can be years before the system func-jobs will be counted than were record-II era. In fact, no other year comes close tions smoothly again and resumes its ed for August 2008.to matching the anticipated 4.9-per-place as the lifeblood of a robust and cent job loss of 2009. The closest Utah expanding economy. In the meantime, Prior to this downturn, the worst has come is a 2.5-percent decline in the economy struggles and underper-month for job loss compared to the 1954 when the Korean War was shut-forms. The immediate repercussions of same month of the prior year was March ting down. Since 1950, Utah has had the downturn are just now beginning 2002, when the Utah economy had only a handful of periods in which jobs to ease, but the longer-term effects are shed 14,900 jobs across that 12-month were being shed. On a calendar year yet to transpire, creating a less-than-span. The best month of job growth basis, only 1954, 1964, 2002, and now rosy outlook for the next year.was June 2006, when 62,500 jobs were 2009 can make that list. To underscore created over the previous 12-month how strong the current downturn is, If the -4.9 percent employment fore-span. The best 12-month period of its negative momentum will likely add cast holds true for 2009, then Utah will job growth greatly exceeded the worst 2010 to the list also.have lost 61,000 jobs between 2008 and 12-month span of job loss—until this 2009. This is an average of the month-downturn. If the August numbers hold It was a great wave of negative national ly flows throughout the year, and the true, then the 71,000 anticipated lost economic events that overwhelmed decline did not occur at a steady pace jobs from August 2008 to August 2009 the usually robust Utah economy. Sub-from January to December. The num-will exceed even the best 12-month prime mortgage defaults, the meltdown bers fell hard throughout the first half period of Utah job growth (which is in the housing market, and finally the of 2009, but seemed to have found a so pervasive throughout Utah’s post-powerful stock market crash of Sep-bottom sometime around September WWII economic history that it almost tember 2008 all conspired to throw the 2009. The numbers thereafter should seems the state’s natural birthright)—a capitalistic economic system that this show improvement, only because the dubious testament to the uniqueness country (and Utah) operates under into economy is not expected to repeat its and extremes of this economic down-its worst fears—the melting down of epic collapse that began in the fourth turn. 8 January/February 201010%3.3% average8%since 19506%4%Utah State Employment Growth Rates2%1950 – 20100%-2%-4%-6%forecast195019601970198019902000201030,00020,00010,000012-Month Numeric -10,000Change in Utah -20,000Employment by Month-30,000January 2008—December 2009-40,000-50,000-60,000-70,000forecast-80,000Jan 08Apr 08Jul 08Oct 08Jan 09Apr 09Jul 09 Oct 091,300,000Jobs gained and then 1,250,000lost within the Utah economyUtah Employment 1,200,000by MonthJanuary 2008—December 20091,150,0001,100,0001,050,0001,000,000Jan 04Jan 05Jan 06Jan 07Jan 08Jan 09forecastSource: Utah Department of Workforce Servicesf = forecastjobs.utah.gov/wiTrendlines 9economic insight | by john mathews, economist Measuring Unemployment: The Saga ContinuesIn the last two issues of Trendlines, sure. If you added discouraged workers states were in the west: California (10.4 economists addressed the dicey (U-4), plus other marginally employed percent), Nevada (10.2 percent), and question of whether the official un-(U-5), and then added in workers that Oregon (11.2 percent). Adding in the employment rate fully captures the sta-were employed part-time for economic other components of the underutiliza-tus of workers.* The theme was brought reasons (dictated by the employer), you tion rate and these rates go to 19.5 per-about by the release of a set of statistics would get what is called the U-6 under-cent, 17.5 percent, and 20.1 percent, for the states called Alternative Mea-utilization rate. Right now, in this deep respectively. sures of Underutilization. The data set recession, there is a significant gap be-has been available for the nation as a tween the standard U-3 unemployment How Does Utah Rank in whole since 1940, but not individu-rate and the rate that includes the total Underutilization Rate?ally for each of the states. The Bureau U-6 defined workers.of Labor Statistics recently made state Clearly, Utah has been heavily affect-data available for 2005 to the present. Beyond the “unemployment ed by the recession with job losses at Release of the state data has magnified rate”—How Much Worse Off is unprecedented levels and unemploy-the interest in these alternative mea-the American Worker?ment rising significantly. In 2006 the sures of underutilization.standard rate was an unprecedented Just looking at the standard (U-3) un-2.9 percent, with an underutilization The standard calculation of the unem-employment rate and comparing it with rate of 5.8 percent. For comparison, the ployment rate divides the number of the “worst” scenario (the U-6) rate, the 2008 standard U-3 rate was 3.5 percent unemployed by the civilian labor force. rate for the U.S. would jump from 8.5 and the accompanying U-6 rate was Measuring the status of American percent to 15.2 percent. (That’s using 6.2. For the year ended in third quar-workers, however, isn’t that simple. Six the most recent annual calculation for ter 2009, Utah’s standard rate jumped alternative measures of underutilized the year ending in third quarter 2009.) from 3.5 percent (2008) to 6.4 percent, labor are defined. These were discussed At the state level, there were six states and the U-6 underutilization rate near-in the previous issues of Trendlines, with double-digit standard unemploy- ly doubled the standard rate, rising to but again are presented in abbreviated ment rates. The underutilization rate 11.3 percent (see the graph). form starting with the unemployment (U-6) was nearly double the standard rate we are used to. This standard un-unemployment rate in these states (see Now compare the Utah rates, both the employment rate is called the U-3 mea-the graph). Half of those six high-rate standard unemployment rate and the *http://jobs.utah.gov/opencms/wi/pubs/trendlines/mayjune09/nationalnews.pdf *http://jobs.utah.gov/opencms/wi/pubs/trendlines/julaug09/whatshappening.pdf10 January/February 2010