The seasonably adjusted unemployment rate for No-vember was. 4.3 percent for Davis County, a drop of two-tenths of a percent from a revision October figure of 4.5 percent. Approximately 95,905 county residents were em-ployed in November 2004 compared to 91,377 in November 2003.
Adjoining counties in the northern region of the Wasatch Front have also seen a decline in unemployment -- Morgan from 3.3 percent in October 2004 to 3.2 in November and Weber from 5.6 percent to 5.4.
State unemployment registered 4.6 percent in November, down from a revised 4.7 in the prior month, a decline of .7 percentage points from the 5.3 percent posted in November 2003. Around 55,800 Utahns were unemployed in Novem-ber 2004, compared to 63,700 during the same period one year ago.
Utah's other primary indicator of current labor market conditions -- the year-over change in the number of nonfarm wage and salaried jobs, continues to show growth, moving forward at a 2.9 percent year-over pace. October's growth rate has been revised slightly downward to 2.9 percent.
But Mark Knold, senior economist for the DWS, wonders if the economic momentum that was demonstrated at the end of last year has peaked, at least for the immediate future. Higher energy prices may have exerted some suppressing influence on the market.
"It's hard to tell," Knold said Tuesday. "World oil prices had been at $50 per barrel, but are now around $40. Still we haven't seen that much of a change at the pumps. Even at $50, it didn't change peoples' buying habits that much.
"Where it will hurt is if we get crimped by winter and there is a higher than expected demand for heating oil," he added. "That will compete with gasoline and force the price of both up. We haven't seen that yet, but we also haven't seen our winter home heating bill either."
In particular, heating bills for January, February, March and April, he feels, will tell the story.
"There's no guarantee," Knold continued, "but there may be a pause in how we spend our money."
Higher energy costs are not just paid by motorists and home owners, but businesses as well. Manufacturing firms, already running on tight budget, find it hard to pass those costs along to customers, so they may not hire new workers or even let some people go.
Knold made it clear, however, that, in his opinion, any leveling off of economic and, therefore, job growth would be temporary. But increasing the pace of job growth in 2005 may not happen until the late spring, or even mid-year.
"The rate of growth could slow to 2.5 or even 2 percent," he explained. "But, in the latter half of 2005, it should be pushing up to 3 or 3.5 percent."
Since November 2003, the U.S. economy has added 2.l million new jobs, a growth rate of 1.6 percent. Utah has added about 31,500 new jobs, a growth rate of 2.9 percent.
Construction had the highest growth rate in Utah at more than 8 percent, a nice rebound from the slowdown during the recession of the early 2000s.
Manufacturing's turnaround is also worth noting. Currently, year-over employment growth there is approaching 3 percent, or approximately 3,100 new jobs.
Heathcare continues to do well in Utah, as does the expansion of the professional and business services industry.
Looking ahead to 2005, Knold believes that any impact from higher energy prices will likely be seen at the height of the winter, the first few months of the year -- January, February, March and April -- as he previously noted.
Another factor to watch is the foreign trade imbalance and falling of the dollar's value, the former being more important than the latter.
"The falling dollar," said Knold, "is a reflection of the trade deficit, and a correction on it."
As such, he's not convinced it's all that bad. In fact, it may have some positive effects.
"If we cut off all trade from overseas," he stated, "and tried to supply all our needs from domestic production, we wouldn't have enough labor to do the job.
"We would end up with a 'wage bidding war,'" Knold went on, "and that would cause inflation."
Usually, the market takes care of trade imbalances, so long as there is a free flow of currency. China, has resisted that in the past, but it has been willing to continue to finance the U.S. budget deficit.
"China is giving dollars back (at low interest rates) by buying U.S. treasuries," noted Knold. "That keeps rates, including mortgage rates, low about the country."
If the situation slowed or stopped altogether, he reported, rates would go up and, suddenly, people, at least in some markets, would not be able to afford their mortgages. This would expose what he termed the "housing bubble," the fact that housing in some areas -- California, the northeast corridor and Florida -- is overpriced.
"But that shouldn't impact Utah," Knold said, "because housing here, and in some other areas, the housing price-demand-supply is in good shape." Utah's December em-ployment numbers will be released Tuesday, Jan. 18, 2005.
bmickelson@davisclipper.com
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