Revenue projections forecast Utah deficit

By Sun Advocate

The state’s latest tax revenue projections indicate Utah currently faces a $25 million to $31 million budget shortfall.
The funding shortfall will require cash-strapped state agencies to make additional spending cuts, pointed out the Utah Department of Workforce Services.
The projected budget deficit will impact the provision of programs and services, including public and higher education. The shortfall may also negatively impact employment at the state agencies
In addition to the state’s budget woes, the economic downturn has resulted in significant cutbacks in Utah’s labor market. The recession has displaced workers and forced numerous Utahns to file for unemployment insurance benefits.
Ending May 10, the four-week average of unemployment insurance initial claims filed across the state registered at 1,864, representing a decrease of 5 percent compared to last year.
The number of all initial claims filed statewide during the week totaled 1,853. Weeks claimed numbered 19,015, a 12 percent decline from last year.
On the national scene, initial claims for jobless benefits fell last week at locations throughout the United States.
The number of displaced workers relying on unemployment benefits hit a level not witnessed since the aftermath of the 2001 terrorists attacks, indicated the U.S. Labor Department.
The drop in filings marked the second consecutive weekly decline in initial claims and brought the four-week moving average, down by 7,500 to 439,750 to the lowest level posted in a month.
Consumer prices fell last month, potentially fueling worries about deflation in the world’s largest economy, pointed out the U.S. Labor Department.
The consumer price index, the federal government’s primary inflation gauge, fell 0.3 percent after rising 0.3 percent in March.
Excluding food and energy prices, the core U.S. consumer price index remained flat for a second consecutive month.
Wholesale prices experienced the largest nationwide decrease on record last month as energy prices plunged and the costs of purchasing cars, light trucks and cigarettes fell. The producer price index measuring factory, farm and refinery gate payments plummeted 1.9 percent in April for the largest drop on record. A significant portion of the decline was due to an 8.6 percent decrease in energy prices, explained the U.S. Labor Department.
Stripping out food and energy costs, the core producer price index plummeted by 0.9 percent for the largest decline since August 1993.
Retail sales fell nationwide in April, led by the largest one-month drop in gasoline sales in more than a year, reported the U.S. Commerce Department. Retail sales decreased 0.1 percent following a 2.3 percent gain in March. Excluding gasoline sales, total retail sales inched up 0.4 percent.
The nation’s trade deficit widened in March as a sharp increase in oil prices boosted the value of U.S. crude petroleum imports to a record high, added the U.S. Commerce Department.
The overall trade gap registered at $43.5 billion, up 7.6 percent from February’s level. Inventories at American retailers, manufacturers and wholesalers climbed 0.4 percent after increasing 0.7 percent the previous month.
Business sales surged 1.8 percent nationwide, the largest jump posted since April 2002. Sales at retailers surged 2.4 percent after falling the previous month and manufacturing sales rose 1.9 percent.
Industrial production decreased for a second consecutive month, confirmed the U.S. Federal Reserve. Output slipped 0.5 percent at the nation’s manufacturing plants, mines and utilities. Capacity utilization fell to 74.4 percent from 74.8 percent. U.S. factories operated at a slower pace or 72.5 percent of capacity for the lowest reading since May 1983.
The federal deficit could exceed $300 billion due to surging defense spending and declining revenues, predicted the congressional budget office.
Import prices posted a record 2.7 percent drop in April, dragged down by sharply lower petroleum costs and falling prices in a wide range of categories, indicated the U.S. Labor Department. Petroleum prices plunged 16.2 percent. Excluding petroleum, import prices fell 0.9 percent. Prices of non-petroleum imported industrial materials and supplies fell 5 percent, concluded the Utah Department of Workforce Services.