Economic Snapshot – June 2021
The economic recovery continues on despite concerns surrounding labor shortages
After a rough April, the U.S. labor market regained some steam. U.S. employers added 559,000 jobs in May and the unemployment rate dropped to 5.8%. May employment data showed a labor market that is slowly improving, although not as quickly as many had hoped for or expected. Employment growth was largely positive, with leisure and hospitality (+292,000); education and health services (+87,000); and government (+67,000) adding the most jobs. Only construction (-20,000) lost a significant number of jobs month to month. Despite growing employment, the labor force participation rate declined, dipping to 61.6% – down from 61.7% in April. An unexpected drop in the labor force participation rate is a sign that more people are deciding to leave the labor market altogether, which could constrain the labor recovery and hold back economic growth.
Utah’s labor market continues to improve at a rate near the front of the national pack. From April 2019-April 2021, Beehive State employment increased 0.9%, compared to a 3.8% decline nationally. Most job gains came in urban and exurban counties. The unemployment rate continued to decrease, declining from 2.9% in March to 2.8% in April. Utah gained 35,600 jobs over the past two years, with the professional and business services (+15,700); trade, transportation, and utilities (+9,800); and construction (+11,900) sectors gaining the most jobs. Government (-10,500); leisure and hospitality (-7,600); and natural resources and mining (-1,400) were the only industries to lose jobs over the last two years. Annual housing price growth continues to accelerate, rising from 16.1% in March to 18.1% in April – the highest rate of annual housing price growth since the housing bubble of the late 2000s.
Idaho’s economy continues to lead the national pack. Idaho and Utah were the only two states to gain jobs over the last two years, averaging 2% annual employment growth over the period. Gem State unemployment continues to improve as well, dropping from 3.2% in March to 3.1% in April. Unfortunately, the labor force participation rate once again declined, dipping to 62.7% in April – tied for the lowest rate on record. Idaho gained 29,300 jobs over the past two years, with the trade, transportation and utilities (+10,500); construction (+7,400); and education and health services (+4,200) sectors gaining the most jobs. Other services (-1,200); information (-700); government (-500); and manufacturing (-500) were the only industries to lose jobs over the last two years. In April, Idaho’s annual housing price growth led the nation once again, hitting another all-time high of 24.9%.