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Show Page 12 The Ogden Valley news Volume XIV Issue XVI June 1, 2007 Sluggish U.S. Economic Growth Likely To Strengthen in Coming Quarters Highlights • Weber County experienced job growth of 2,700 jobs (2.9%) from a year ago. Joblessness registered 2.8%, down from the 3.6% unemployment rate one year ago. • The Zions Bank Small Business Index for Utah was 104.9 in April 2007, up from a revised 104.5 in March 2007. • Utah's unemployment rate was estimated at 2.4% in the latest month, up from the prior month's 2.3% rate. Total Utah employment is up an estimated 53,500 jobs during the past 12 months. • Sluggish U.S. economic growth of the past 12 months is expected to give way to stronger growth over the next 4-5 quarters, providing a boost for Utah's small business sector. • The U.S. economy added 88,000 net new jobs in April, the smallest gain in 29 months. February and March job gains were revised lower by 26,000 jobs. The U.S. unemployment rate rose slightly to 4.5%. Sluggish U.S. Economic Growth Economic growth recorded its slowest growth pace in four years during 2007’s first quarter. The U.S. Commerce Department’s first official estimate of economic growth (GDP) came in at a 1.3% real (inflation adjusted) annual rate. By comparison, the financial community had expected growth closer to a 1.7% pace. More recent construction data suggests the 1.3% growth pace could be revised closer to 1.5%-1.6%. The U.S. Commerce Department will revise the current estimate in both late May and late June Weakness in the nation’s housing sector contributed to the soft economic growth pace. New home construction fell at a 17.0% annual rate during the quarter. Such performance was actually better than the 19.8% housing contraction pace in the prior quarter. Spending on home construction has now declined for six consecutive quarters, the first such occurrence since the early 1980s. Strength during the first quarter was primarily found in the consumer spending area. Consumer spend- ing, which accounts for roughly 70% of overall U.S. economic performance, rose at a 3.8% annual rate during the January to March period. The 3.8% growth pace compared to a 4.2% pace during the prior quarter. Another positive aspect of the first quarter report was the fact that business inventories grew at a lesser rate during the first quarter than in the fourth quarter. Since GDP is a measure of what is produced, not what is sold, the leaner level of production in the first quarter suggests rising production in the current quarter We continue to expect the U.S. economy to gain strength as 2007 matures, with stronger economic growth in each subsequent quarter. We also expect to see a return to stronger economic growth in 2008. U.S. economic growth is a component of the Utah Small Business Index. slightly from the prior month’s 2.3% rate. The 2.4% rate compares to a jobless rate of 3.1% during the same month one year ago. A jobless rate of 2.3% in March ranked with the lowest ever recorded in the state and was the lowest in the continental U.S. A higher Utah unemployment rate is a positive contributor to the Index as it implies increased access to Utah labor. Utah’s unemployment rate averaged 2.9% in 2006, 4.3% in 2005, 5.1% in 2004, 5.7% in 2003 and in 2002, and 4.4% in 2001. These rates compare to an average Utah unemployment rate of 3.5% between 1995 and 1999. Total Utah employment rose by an estimated 53,500 jobs (up 4.5%) over the past 12 months. The 4.5% rise is one of the strongest annualized Utah gains in more than 10 years, and is the strongest job growth rate in the nation. This rise comUtah Employment pares to a revised gain of 52,900 jobs in The Utah unemployment rate—the most the prior year-over-year period. heavily weighted component of the Zions Bank Small Business Index for Utah-was ZIONS cont. on page 15 estimated at 2.4% in the latest month, up |
