Saturday, August 28, 2010

Utah Digging Out of Recession

The Associated Press August 24, 2010, 8:14AM ET


Utah is adding jobs faster than it is losing them for the first time in several years, state economists said Monday.

Utah's unemployment rate remained steady at 7.2 percent in July amid signs the state is digging itself out of the recession.

Utah added 17,200 jobs over the past year, with the state work force expanding by 1.5 percent to 1.19 million jobs, according to the state Department of Workforce Services.

The recovery, however, is slow. And the unemployed are filing more than 2,000 jobless claims a week, double the historic average, said Mark Knold, chief economist of the Department of Workforce Services.

Those claims were as high as 5,000 a week at the start of 2009.

Signs of job growth are encouraging, although the survey data is subject to revision and could backslide, Knold said.

Utah is still playing catch-up. About 75,000 jobs have been removed from the state economy over the past three years, he said.

Three of Utah's economic sectors are still showing net job losses -- manufacturing, construction and government.

Knold said the construction sector could stabilize by year's end. Utah has lost a third of its construction jobs since July 2007, and it could take another 10 years before the state returns to the previous high mark in that industry, he said.

During the recession, Utah manufacturers scaled back employment by 4,100 positions to 20,000 -- the worst-hit industry in the state, Knold said.

Other employment sectors made modest gains over the past year.

The department said nearly 98,000 people in Utah were considered unemployed in July.

Utah's July unemployment rate was well below the national figure of 9.5 percent.

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Now that school has begun and the fall season is upon us, we have a better handle on what the unemployment situation is.  I'm using the number of attendees at our Monday morning networking meeting as the gauge here.  Last January the room where we meet was filled to overflowing.  We were seeing around 175 -180 participants every Monday monring.  I have joked that we would only hold that meeting for as long as it took to get the numbers down to the size where we could meet in a phone booth.

The drop since January has been gratifying.  We've got the only job in the Church I know of where you succeed if no one shows up for the meeting. . .  For the last several months we have seen the number of participants decline to 70 or 80 each week.

Even when David Checketts was our featured speaker a couple of weeks ago and I expected to see some "ringers" who weren't really unemployed show up to hear him speak, the number only ticked up slightly to 95.  A year ago, David spoke to a standing-room-only audience in excess of 200.  His stake in New Canaan, Connecticut, had 120 heads of household out of work last year.  This year he reported that number is down to 10.  Despite what the gloomy national statistics are telling us, improvement is discernable and real but still slower than necessary.

Growth is slow because of government intervention.  Get government out of the way and the economy will take off.  Free markets hate uncertainty, and no one has injected more uncertainty into the equation more than the President of the United States and his majority leadership in both Houses of Congress.  Force feeding a fast diet of economic fat fueled by debt, sugar-filled programs, regulatory bills filled with new agencies designed to bypass Congressional oversight and debate, coupled with expanded entitlement spending has been disastrous.

Despite all that, there is significant evidence I can point to that Utah is leading the way out of this recession.  Because Utah's constitution mandates balancing the budget each year, businesses here are hiring, growing and defying the odds.  The growth is slow but discernable and sustainable despite the malaise in evidence in other parts of the country.

There, I delivered some good news.  And there's more. . .

It was reported earlier in the week that 14 Utah businesses are in this year's list of the Inc. 500's fastest growing companies, further evidence Utah is rising above the recession doldrums.  Funding Universe leads the way in Utah at number 34.  And what's the business model for Funding Universe you ask?  Matching angel investors with budding entrepreneurs and their startup businesses. 

Now if we can just reverse the disturbing effects of socialism, entitlements, bailouts and handouts, we'll progress even faster.

David Brooks wrote a thoughtful piece in the New York Times this morning comparing Germany's approach to the financial crisis with America's.  Under conservative leadership in Germany, notably German Chancellor Angela Merkel, Germany elected to spend significantly less on stimulus borrowing as a percentage of GNP, and their unemployment numbers are back down to pre-crisis levels.  Germany's economy is expanding right now at a blistering pace.  However, America's bloated experiment with massive debt and unbridled spending has frozen economic recovery by contrast.  Germany rejected the thinking of America's "best minds" on economics and has proven their case.  She has shown the example to America -- if you're the government, you can't borrow and spend your way out of a recession.  Hip, Hip, Hooray for capitalism, Ms. Merkel!!

Let's hope Americans have seen enough data to reverse course in November and follow the example of Germany.  I never thought those words would come out of my cyber pen, but there you go. . . America should take an economic lesson from Germany.   

Unthinkable. . . until now. 

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