Summit County unemployment rate hits a stupefying 20.3%, reflecting Park City’s economic turmoil
The unemployment rate in Summit County in April hit a stupefying 20.3%, the state Department of Workforce Services reported, a figure that attaches another statistical measure, and one that is especially sobering, to the economic turmoil in the Park City area caused by the spread of novel coronavirus.
It was expected the unemployment rate would spike in April, but the sheer volume of the job losses was not clear until the state’s release of the monthly tally. The unemployment rate in March was 2.9% while the rate in April of 2019 was 2.6%.
Park City Mountain Resort and Deer Valley Resort ended the ski season in March, several weeks earlier than scheduled, in an effort to help curb the spread of the illness. Economic activity cratered with the end of the ski season, and there were widespread temporary business closures in April. There were layoffs and furloughs across the Park City area.
The Department of Workforce Services did not seasonally adjust the 20.3% unemployment rate in April, explaining in a footnote the upswing is of an unusual nature. The March and April of 2019 numbers were seasonally adjusted. The adjustments are designed to flatten swings in the rates based on seasonality.
The 20.3% was significantly higher than the statewide figure of 9.7% in April as well as the national number of 14.7%. It also topped the rate in Wasatch County, which reached 17.5%. The Wasatch County figure is notable since there are numerous people living there who work in the Park City area, and the Park City sphere of economic influence reaches into that county.
Joblessness brings broader concerns for an economy since it significantly impacts consumer spending. As the unemployed reduce spending, the effects stretch across numerous sectors of the economy. The businesses the unemployed would otherwise frequent lose those sales as the sting moves through the economic chain.
The 20.3% is the highest unemployment rate in Summit County in decades. It is likely the last time the number reached toward that level was in the mid-20th century, as a collapse in the silver-mining industry that drove the economy starting in the late 19th century led to a bust that lasted until the ski industry was launched in the 1960s. The figure soars above the unemployment numbers in the recessions in the early 1990s and the early 2000s, as well as the terrible recession a decade ago. The effects of the recession from 2007 until 2009, much worse than the two prior ones, involved a gradual increase in the Summit County unemployment rate, topping out in the summer of 2010 at 7.7% in July of that year. The gradual increase was in stark contrast to the spike this April. The unemployment rate steadily dropped after the 2010 peak, falling consistently starting in 2011. The rate was in the low 2% range at the start of 2020.
The economic impacts of the spread of the illness on Park City and surrounding Summit County are expected to last for months, at a minimum. There are acute concerns about a drop in sales during the summer-tourism season, which has already been hurt by the cancellation of the Tour of Utah bicycling race, the weekly Park Silly Sunday Market and other events. The three-day Memorial Day weekend appeared to be solid for businesses, though, providing some hope that the forecasts for a difficult summer are overly pessimistic. Park City leaders have agreed to pedestrianize Main Street on Sundays in the summer and early fall, a step meant to encourage people to visit the shopping, dining and entertainment strip in an era of social distancing.
City Hall, meanwhile, is amid the most difficult budget talks since the last recession as leaders address projected revenue shortfalls. There are especially concerns about the prospects of a drop in sales taxes, a key revenue stream for the municipal government, should tourism dip.
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Park City on Tuesday hosted an open house designed to provide information about a wide range of municipal projects and programs, but the event took on greater meaning with the gathering becoming among the largest City Hall-organized events held in person in the more than a year.