Sevier County fares better in 2020 than the rest of the nation
Sevier County, and Utah in general, fared better in 2020 than the rest of the nation, according to data presented by Lecia Langston, Senior Economist for the Department of Workforce Services at the Salina Area Chamber of Commerce meeting held Thursday, May 6, 2021.
“Sevier County shook off the effects of the pandemic recession by year end 2020, displaying year-to-year job growth for the first time since COVID-19 struck,” she said. “While not all industries moved into the black, the overall gain is indicative of a stronger economy. Not surprisingly, the county’s jobless rate continued to shrink as did first time claims for unemployment insurance. And as elsewhere, stimulus dollars continued to prop us sales. Overall, Sevier County’s economy continued to repair itself.”
Langston said this recession was not a typical business cycle recession, but rather a virus-cession- caused by shutdowns and health restrictions. Utah is only second to Idaho in bouncing back economically and Sevier County has already returned to job growth, though the rest of the nation is still down. The most vulnerable were typically the ones who experienced job losses and in general, began making substantially more on unemployment than they were working causing high unemployment, but employers can’t find workers- and this doesn’t typically happen during a recession. In addition, stock prices have risen, and those who were able to work from home saved money during this time period.
Data reports that April 2020 was Sevier County’s worst job-loss month since the pandemic began but between December 2019 and December 2020, Sevier County added nearly 180 (net) new jobs for a growth rate of 2%. Retail trade proved the primary driver in this increase with lesser help from various other major industries. Leisure/hospitality services employment, generally the hardest hit industry in the pandemic recession, was only down slightly. Transportation/warehousing, mining, and manufacturing, however, all showed notable job losses.
The economic effects of COVID-19 bumped Sevier County’s unemployment rate up in April 2020 to 7.8%, more than double the figure a year earlier. Nearly one year later, the jobless estimate had receded to just 3.6%. Less dependence on leisure/hospitality services employment helped keep the county’s jobless rate relatively low. As elsewhere, first time claims for unemployment insurance spiked in the early days of the pandemic. They have since moderated. Nevertheless, in 2021 new claims are still running somewhat above 2019 levels.
So far in 2021, construction and transportation/warehousing have generated the highest number of new claims. During the pandemic, average wages took a seemingly contradictory jump. Between the fourth quarters of 2019 and 2020, the average wage increased nearly 7%. This increase occurred primarily because jobs lost during the pandemic tended to be lower paying and/or part time.
In construction and sales, Sevier County’s gross taxable sales surged 22% between the fourth quarters of 2019 and 2020. Retail trade sales spurred this increase as residents appeared to be spending their stimulus dollars. The strongest gains occurred at motor vehicle/parts stores, followed by building materials/garden stores, non-store retailers (such as Amazon) and general merchandise stores such as Walmart.
Langston reported that about half of Utah’s counties are already experiencing job growth and big gains are in the retail/trade industries, professional/business services, and wholesale trades. Sevier County has experienced large losses in transportation, mining, and manufacturing. However, most industries added employees rather than lost them, and wages surged in 2020; there was a 6-8% increase in the average wages. One reason for this is the lower paying jobs were lost, pushing the average up, but in the fourth quarter of last year, wages were dramatically up, causing economists to believe year end bonuses (thanks to PPP funds) were awarded and mortgage companies who rely on commission, have been unbelievably busy with refinancing due to the low interest rates.
She said sales are surging because of government stimulus checks, unemployment supplements, and no cost loans to businesses, all of which are “fake injections” into the economy, which could cause really big problems on down the road.
She said the best predictive indicator of a business cycle recession is the yield curve, or the plotted difference between long term and short-term interest rates. An inverted yield curve predicts a recession, and just before the pandemic hit, indicators predicted one. Now, it’s no longer inverted, thanks to the trillions of dollars dumped into the economy by the federal government, but she said she’s not so sure we can trust that prediction anymore.
“We’ve got some things going on,” she said. “Stock prices have gone up during this recession; we’ve pumped trillions into the stock-market, and it’s now overvalued. The earnings are not reflective of the true values of the stocks. The terribly over valued stocks are cause for concern, as is the fact that the government debt is at its highest ever.”
She said the COVID and stimulus money is just masking economic vulnerabilities, and the housing market is showing signs of overheating. In addition, the stimulus was too broad, we did not all NEED a stimulus check, and the end of the pandemic is in sight, so what now?
“First off, don’t panic,” she said. “These are some things to think about and I’d encourage everyone to watch the indicators and make appropriate decisions. The Department of Workforce Services has a lot of data on our site with new information fresh each quarter.”