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Show Page The Ogden Valley news Volume XVIII Issue XII December 1, 2010 Weak U.S. Economic Growth Not Doing Much for Weber County’s Small Businesses Highlights • The Zions Bank Small Business Index for Utah was 112.0 in October 2010, down from a revised 112.6 in September 2010. • Utah's unemployment rate was estimated at 7.5% in the latest month, up from the 7.4% rate of the prior month. Total Utah employment grew by an estimated 9,000 jobs during the past 12 months. • Weber County experienced a decrease of 500 jobs (-0.5%) from a year ago. Joblessness registered 8.4%, up from the 7.8% unemployment rate one year ago. • Weak U.S. economic growth continued during 2010's third quarter. The 2.0% real (after inflation) annual growth pace, when added to the soft 1.7% second quarter real annual rate, was roughly half the average growth pace of the past 30 years. We expect slightly stronger performance in coming quarters. • The U.S. economy added an estimated 151,000 net jobs in October, much better than expectations of a 68,000 job rise. The addition of 159,000 private sector jobs during the month, also stronger than expected, was a step in the right direction. In addition, job data of August and September was revised to show the addition of 110,000 more jobs. The U.S. unemployment rate remained at 9.6% in September Sluggish U.S. Economic Growth The U.S. economy grew at a soft 2.0% real (after inflation) annual rate during 2010’s third quarter, largely matching economists’ forecasts. Such growth represented the fifth consecutive quarter of U.S. economic growth since the Great Recession officially ended in June 2009. By comparison, U.S. growth over the past 30 years has averaged 3.6% annually after inflation, or twice the pace of the past two quarters. In my view, weaker U.S. economic growth in recent quarters has resulted from 1) the fact that millions of American business owners and consumers simply lost faith in the “bigger government is better” view of the current Administration and Congressional leadership...and 2) that recovery from the ravages of the Great Recession, the most painful economic and financial hit to our economy and our lives collectively in 80 years, does not happen quickly. A declining number of forecasting economists continue to suggest that a double-dip recession is likely in 2011. Prior forecasts of some economists of a rapid recovery from the Great Recession have also declined. Our longterm view of an economy struggling along at a modest 2.0%-3.0% real annual pace remains on track. Republican gains in the 2010 mid-term elections hold the promise of slowing growth in federal spending and smaller budget deficits. Efforts to slow excessive health care and financial system bureaucracy should also be successful. Whether the two sides can work together to address critical issues remains unanswered. The performance of the U.S. economy is a component of the Small Business Index, as is the performance of the regional and global economies. Stronger U.S. economic growth is a positive contributor to the Index. The Index The Zions Bank Small Business Index for Utah was 112.0 during October 2010, down from a revised 112.6 during September 2010. 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. Utah Employment The Utah unemployment rate-the most heavily weighted component of the Zions Bank Small Business Index for Utah-was estimated at 7.5% in the latest month, up from 7.4% during the prior month. The 7.5% rate compares to a 6.7% 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. Other associated factors typically tied to a higher unemployment rate, such as lesser job creation, lesser income gains and lower retail sales, pull the Index lower. Utah’s unemployment rate averaged 6.6% during 2009, 3.7% in 2008, 2.8% in 2007, and 3.0% in 2006. These rates compare to an average Utah unemployment rate of 4.3% between 1990 and 2005. Total Utah employment grew by an estimated 9,000 jobs (up 0.8%) over the past 12 months. This increase compares to a revised gain of 13,500 jobs in the prior year-over-year period. Utah lost 60,700 jobs in 2009, lost 800 jobs in 2008, added 49,600 jobs in 2007 and added 55,700 jobs in 2006. These totals compare to gains averaging 29,000 net new jobs annually between 1990 and 2005. More recently, fewer job gains, leading to lesser income creation and weaker retail spending have a negative impact upon Utah’s small businesses...and therefore, the Index. Local Performance Weber County experienced a decrease of 500 jobs (-0.5%) from a year ago. Joblessness registered 8.4%, up from the 7.8% unemployment rate one year ago. Davis County payrolls increased by 800 jobs (0.8%) in the past year. The unemployment rate was 6.9% in the latest month, up from 6.1% one year ago. Cache County employment rose by 300 jobs (0.5%) in the latest 12-month period. The area’s jobless rate was 5.6%, up from the 4.9% rate of one year ago. Salt Lake County employment rose by 1,400 jobs (0.2%) over the year. The county’s unemployment rate was 7.3% in the latest month, up from 6.7% last year. Utah County employment rose by 300 jobs (0.2%) over the last 12 months. The area’s jobless rate was 7.7%, up from the 6.6% rate of one year ago. Washington County payrolls declined by 1,200 jobs (-2.5%) in the past year. The unemployment rate was 9.8% in the latest month, up from 9.2% one year ago. National Employment The U.S. Department of Labor reported a net gain of 151,000 jobs in October 2010, much stronger than the 68,000 net gain expected. The rise of 159,000 jobs in the private sector was also greater than expectations. In addition, August and September job data was revised to show the addition of 110,000 more jobs that originally reported. The U.S. unemployment rate remained at 9.6% in October. The current 9.6% jobless rate compares to the 10.1% rate of one year ago and greatly exceeds the 6.6% rate of October 2008. Goods-producing employment rose by 5,000 jobs in October. Manufacturing employment fell by 7,000 positions, while construction added 5,000 jobs. Mining and logging employment rose by 7,000 jobs. Private-sector service-providing employment rose in October by 154,000 positions. The professional & business services sector added 46,000 jobs, while the leisure & hospitality sector lost 5,000 jobs. The education & health services sector added 53,000 positions in October, while retail trade added 28,000 jobs. Overall government employment fell by 8,000 jobs during the month. The U.S. economy suffered a net decline of 3.6 million jobs during 2008, the worst year since 1945. The loss of 4.8 million jobs during 2009 easily surpassed the 2008 total. The most recent recession was the first since the Great Depression to see all net job gains of the prior economic expansion eliminated. The American economy added an estimated 874,000 net new jobs so far this year, or 87,000 per month. Roughly 130,000 net new jobs need to be added monthly just to meet the needs of a rising population, and just to keep the unemployment rate stable. The November 2010 Zions Bank Small Business Index for Utah will be released on December 7, 2010. Zions Bank is Utah’s oldest financial institution and is the only local bank with a statewide distribution of branches, operating 105 full-service branches throughout Utah. Additional information is available at <www.zionsbank.com> PROJECT LINUS cont. from page 1 is brought in to a shelter in the middle of the night with only the clothes on their back, they tend to cling to these blankets; it’s an important form of comfort at a critical time. “I deliver almost 500 blankets a month to several places in Northern Utah; I deliver to seven hospitals—Logan, Tremonton, Brigham, McKay Dee, Ogden Regional, Davis, and Lakeview. I deliver blankets to their pediatric units as well as their newborn intensive care units. Blankets are also delivered to 15 shelters, The Christmas Box House, YCC, American Red Cross, Birthright of Utah, Catholic Community Services, International Relief, and to Fallen Heroes. Blankets are donated to thousands of children who have been abused or abandoned; or who have been traumatized, injured, or are currently ill. “Project Linus delivers blankets to newborn babies, as well as to 18-year-olds, and to children of all ages in between. Because of this, blankets of many varieties and sizes are accepted.” If you would like to donate a blanket or quilt, Nebeker states that Project Linus accepts brand new, homemade, odor-free blankets. She also added that 100 percent of the efforts within the organization are voluntary. The Northern Utah Chapter of Project Linus has been in operation for about eight years. Nationally, there are about 400 chapters that, nationwide, have distributed approximately 3.2 million blankets since the organization’s inception. If you would like more information about Project Linus, or would be willing to donate a blanket or quilt, you may call Chapter Coordinator Jean Nebeker at 801-479-7733, or mail or drop off quilts at her home at 979 E. 5675 S., South Ogden, Utah 84405. Sandee Drake, a member of the Ogden Valley Piece of Mind Quilt group, displays seven quilts she finished recently to donate to the Northern Utah Chapter of Project Linus. |