SALT LAKE CITY — While Utah’s economy is generally performing better than the U.S. as a whole, consumers and job seekers are feeling the squeeze when it comes to buying and hiring in the Beehive State.
Employment data released Friday by the Utah Department of Workforce Services put the state’s April unemployment rate at 3.8%, the same as March and lower than the national rate of 4.3%.
That amounts to 69,200 Utahns without employment.
“We are seeing a mixed economic picture. On one hand, job expansion is outpacing the nation and unemployment is low,” said Ben Crabb, chief economist with the Department of Workforce Services. “On the other, labor force growth is flat, and hesitation from employers to expand their headcount signals a cautious approach to the future.”
Crabb added that the hiring rate has decreased to levels not seen since 2010, despite elevated job postings, creating a “frustrating reality” for those seeking employment.
As for how the unemployment rate can remain healthy despite slow job expansion, Crabb said it boils down to the lack of growth in the state’s labor force from a demographic defined as “all people age 16-plus who are either working or looking for work.”
Typically, this number grows year-over-year in Utah.
“Over the last year, the state has seen a moderate increase in the unemployment rate, positive but slow job growth, and a flat labor force level. It has also experienced an increase in the number of unemployed people who are experiencing longer-term unemployment of 27 weeks or more,” Crabb said.
“Altogether, this reflects a cooling labor market, in which employers are being more selective in hiring. Demand for labor is not pulling new entrants in the labor market, and overall labor force participation rates are declining, as some workers, particularly in the youngest and oldest age groups of the workforce, leave the labor force,” he added.
The economic challenges don’t start and stop with employment, though.
A report last week from the Utah Chamber and Kem C. Gardner Policy Institute showed Utah’s consumer sentiment dropped sharply in April, falling 13.5% from 81.5 in March to 70.5.
Interestingly, the downfall comes after Utah’s sentiment rose 3.1% in March despite national declines.
At that time, Zion’s Bank chief economist Robert Spendlove noted that the war in Iran, being such a new development when the survey was conducted, likely impacted the sentiment.
Now, those wartime constraints are being felt, even in Utah, with rising gasoline prices being one culprit of dampening sentiment.
As of Friday, a gallon of regular gas was averaging $4.68 across Utah, higher than the national rate of $4.52.
Since the onset of the war in Iran, inflation has also been on the uptick, with the report from the Utah Chamber and Gardner Institute noting U.S. headline inflation increased to 3.8% in April, up from 3.3% in March — good for the highest reading since May 2023.
“Utah’s economy faces emerging headwinds as inflation and consumer concerns rise,” Natalie Gochnour, director of the institute, said in a statement. “Consumer sentiment dropped sharply in April, as higher gasoline prices and rising inflation appear to be weighing on households.”
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