Utah economy, job creation lead the nation but aren't safe from federal policies' impact

Yahoo

17-05-2025

The downtown Salt Lake City skyline is backdropped by fresh snow on the Wasatch Mountains on Monday, Jan. 15, 2024. (Photo by Spenser Heaps for Utah News Dispatch)
Utah's rates on unemployment and job growth are surpassing national averages this year and the state has kept its top spot in economic outlook ranking. But, amid tariffs, and a dropping consumer sentiment, economists warn the state is entering risky waters.
The state's economy is outperforming other states, with jobs growing 2.1%, almost doubling the 1.2% national average. Utah also has some of the lowest unemployment rates, 3.1%, while that number remained unchanged at 4.2% nationally, according to a report from the Utah Department of Workforce Services released on Friday.
'Labor market indicators remain robust, with broad job expansions across industries and a low unemployment rate,' Ben Crabb, chief economist with the department, said in a statement. 'The level of job openings continues to exceed the number of unemployed workers in the state as employers promptly employ available labor.'
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The top private sector industries adding jobs to the state are education and health services, followed by construction and manufacturing.
According to Kem C. Gardner Policy Institute data shared by Natalie Gochnour, the institute's director, to the Salt Lake City Council on Tuesday, nearly half of the state's jobs are in Salt Lake County, and 1 in 4 jobs are in Salt Lake City. 'A stunning number when you think of the breadth of the state,' Gochnour said. That's over 400,000 roles in the city.
Immigration, housing and tariffs awake uncertainty in Utah's 2025 economic outlook
'We're in an elite economy nationwide, as a state, and the urban center is participating and contributing to the economic vibrancy of the state in a big way.'
Utah also led the nation in gross domestic product growth in 2024 with 4.5%, compared to a 2.8% national average, and earned other top spots in the country, including one of the highest household incomes with cost of living adjustments, and the lowest poverty rate.
With this economic growth, whether a recession is coming is not apparent yet, Gochnour said. However, Utahns may still feel the impact of other economic national trends, and she believes it is for 'self-inflicted' reasons, such as tariffs, which she described as 'a tax on trade.'
'A reason many of the economists aren't forecasting a recession right now is because as things start to look bad, the administration will change and come to the rescue,' Gochnour said.
During the first term of the Trump administration, tariff rates went from 1% to 3%, which the Biden administration kept. Now, according to Moody's Analytics calculations, the potential rate during President Donald Trump's second term could climb to 11.5%.
Estimates predicting the future economics in the country have been uncertain this year and are constantly changing. But, the latest numbers, according to the Bureau of Economic Analysis, the Gardner Institute and Wells Fargo Economics, indicate that there may be a recession during the last half of 2025, with the country's gross domestic product falling 0.9% during the third quarter and 1.1% during the fourth quarter.
'Right now, the probability of a recession among most economists is somewhere in the 45% to 60% rate,' Gochnour said. 'So, flip of a coin. We'll see.'
What's already happening, though, is the free fall of consumer sentiment in the country, an index used to measure how consumers view current and future economic conditions.
'And so you got a consumer that's feeling a little funky, you've got businesses with a lot of uncertainty, so they're not hiring, or they're pausing, they're not investing, and eventually that's going to show up in the numbers,' she said. 'This should be a leading indicator to all of us.'
Another fall felt in the state is a decline of job growth in leisure and hospitality. According to the Department of Workforce Services' summary, that industry shrank by 400 jobs in the last year, the second-largest private sector decline after the trade, transportation and utilities industry, which experienced the loss of 2,300 jobs.
Gochnour attributes that to tempered international travel, an effect of federal policies, as well as cuts in national parks, with employee counts declining 13% only this year, among other causes. The forecast for international visitation as of March is a 9.4% decline, according to Tourism Economics, an Oxford Economics research company.
'This is something that's expected and well known in the leisure and hospitality sector, that we're going to feel some pain from that contraction,' she said.
However, there will also be some other balancing forces, at least for Salt Lake City, with the opening of The Church of Jesus Christ of Latter-day Saints' remodeled Temple Square in 2027, which is expected to attract millions of visitors.
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