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Show Page 10 The Ogden Valley news Volume XV Issue XVII August 15, 2008 Sluggish U.S. Economic Growth Continues to Impact Weber County Small Businesses Highlights • Weber County experienced job growth of 800 jobs (0.9%) from a year ago. Joblessness registered 3.3%, up from the 2.6% unemployment rate one year ago. • Davis County payrolls expanded by 400 jobs (0.3%) in the past year. The unemployment rate was 2.9% in the latest month, up from 2.3% one year ago. • The Zions Bank Small Business Index for Utah was 84.3 in July 2008, down from a revised 86.7 in June 2008. • Utah's unemployment rate was estimated at 3.2% in the latest month, unchanged from the prior month's rate. Total Utah employment is up an estimated 11,500 jobs during the past 12 months. • U.S. economic growth during 2008's second quarter was a less-than-expected 1.9% real annual rate. Growth for the two prior quarters was also revised downward. • The U.S. economy lost an estimated 51,000 net jobs in July, fewer than expected. The U.S. unemployment rate rose to 5.7%, a four-year high. Growth Weaker Than Expected The U.S. economy grew at a real (inflation adjusted) annualized rate of 1.9% in the second quarter of 2008, a somewhat disappointing reading as most forecasts were expecting growth of around 2.3%. Gross domestic product (GDP) growth was propped up during the quarter by the economic stimulus rebate checks and by booming export activity. Measures for GDP in the two prior quarters were also revised lower. First quarter growth was revised down slightly to a 0.9% real annual rate from the previously reported 1.0% growth pace. Of greater concern was the downward revision to growth in the final quarter of 2007. The latest report shows that the economy actually contracted at a 0.2% real annual rate during the fourth quarter, adding fuel to the recession debate. Prior GDP measures for this quarter had shown growth of 0.6%. One element of good news in this latest GDP report showed that business inventories shrank during the second quarter. Since GDP is a measure of what is produced in an economy rather than what is sold, growth should be positively impacted in future quarters by a ramp-up in production to replace inventories. Even so, economic growth in the final half of 2008 will likely slow as the stimulus effect of the rebate checks begins to wane. We expect stronger growth to return by mid-2009. U.S. economic growth (GDP) is a component of the Utah Small Business Index. Slower growth or contraction in the U.S. economy negatively impacts Utah small businesses. Utah Employment The Utah unemployment rate-the most heavily weighted component of the Zions Bank Small Business Index for Utah-was estimated at 3.2% in the latest month, unchanged from the 3.2% rate of the prior month. The 3.2% rate compares to a 2.7% rate during the same month one year ago. 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 2.7% in 2007, 3.0% in 2006, 4.2% in 2005, and 4.9% during the 2000-2004 period. These rates compare to an average Utah unemployment rate of 3.5% between 1995 and 1999. Total Utah employment rose by an estimated 11,500 jobs (up 0.9%) over the past 12 months. This rise compares to a revised gain of 16,700 jobs in the prior year-overyear period. The 0.9% rise is the first time since 2003 that Utah employment growth has dipped below 1.0%. Utah added 47,800 jobs in 2007, 55,700 jobs in 2006, 43,700 jobs in 2005, and 30,200 jobs in 2004. These totals compare to gains averaging 38,000 new jobs annually during the 1994-2000 period and a net loss of 1,300 jobs in 2001 through 2003. More recently, weaker job gains, leading to lesser income creation and softer retail spending, have a negative impact upon Utah’s small businesses...and therefore, the Index. from a revised 86.7 during June 2008. The Index measures business conditions from the viewpoint of the Utah small business owner or manager. A lower Index number is associated with less favorable business “conditions” for Utah’s small businesses. The Index uses 100.0 for calendar year 1997 as its base year. The Index includes revisions to various historical and new forecast components as they become available. Local Performance Weber County experienced job growth of 800 jobs (0.9%) from a year ago. Joblessness registered 3.3%, up from the 2.6% unemployment rate one year ago. Davis County payrolls expanded by 400 jobs (0.3%) in the past year. The unemployment rate was 2.9% in the latest month, up from 2.3% one year ago. Cache County employment grew by 1,100 jobs (2.2%) in the latest 12-month period. The area’s jobless rate was 2.2%, up from the 1.7% rate of one year ago. Salt Lake County employment rose by 6,800 jobs (1.1%) over the year. The county’s unemployment rate was 2.9% in the latest month, up from 2.3% last year. Utah County employment declined by 1,100 jobs (-0.6%) over the last 12 months. The area’s jobless rate was 2.9%, up from the 2.2% rate of one year ago. Washington County payrolls contracted by 100 jobs (-0.2%) in the past year. The unemployment rate was 3.7% in the latest month, up from 2.5% one year ago. National Employment The U.S. Department of Labor reported a net loss of 51,000 jobs in July 2008, the seventh monthly decline in a row. Economists had expected even larger job losses for the month. Revisions for May and June showed 26,000 fewer jobs lost than previously reported. The U.S. unemployment rate climbed 0.2% in July to 5.7%, the highest since March 2004. The current 5.7% jobless rate is a full 1.0% higher than the 4.7% rate of one year ago. The average hourly wage rose 0.3% (six cents) to $18.06 hourly, a rise of 3.4% over the past 12 months. Goods-producing employment continued to decline in July, with a net loss of 46,000 jobs. Construction employment fell by 22,000 positions, while manufacturing lost another 35,000 jobs. Service-providing employment also declined in July by 5,000 positions. The education & health services sector added 39,000 net new jobs during the month, while the professional & business services sector lost 24,000 jobs. The government sector added 25,000 net new jobs during the month, while the trade, transportation, & utilities sector lost 39,000 jobs. The estimated net decline of 463,000 jobs during 2008’s first seven months was a painful contrast to the average annual gain of 1.9 million net new jobs during 2005 to 2007. However, the average loss of 66,000 jobs monthly during 2008 was much less painful than the 181,000 average monthly job loss during the 2001 recession. The August 2008 Zions Bank Small Business Index for Utah will be released on September 9, 2008. Zions Bank is Utah’s oldest financial institution, and is the only local bank with a statewide distribution of branches. Founded in 1873, Zions has been serving the communities of Utah for 135 years. Additional information available at <www.zionsbank.com> Small Business Index The Zions Bank Small Business Index for Utah was 84.3 during July 2008, down Why not make it a Permanent Stay? Contact one of our three convenient Valley locations and find out why living in this pristine valley will ignite the flame within! EDEN OFFICE Next to Valley Market HUNTSVILLE OFFICE 2555 North Wolf Creek Drive, Eden UT 84310 Office: 801.745.0100 Fax: 801.745.1473 237 S 7400, Huntsville, UT 84317 Office: 801.745-2370 Fax: 801.745-3177 MOUNTAIN GREEN OFFICE 5941 Old Highway Rd, Morgan, UT 84050 0GmDF t 'BY |