Ariz. jobs data may portend trouble
Unemployment rate rises to 4.7 percent
Betty Beard
The Arizona Republic
Jan. 18, 2008 12:00 AM
Arizona's unemployment rate rose to 4.7 percent in December, more than a full percentage point higher than it was two months earlier.
While the state gained 10,100 jobs in December to hit a new record of 2.76 million, the number was a scant 1.1 percent higher than the same time a year earlier, the Arizona Department of Commerce reported Thursday.
"This is an economy that is losing momentum," said Marshall Vest, director of the Economic and Business Research Center at the University of Arizona. "We're still adding jobs, but two years ago employment growth touched 6 percent. Today, it is 1 percent, and it's headed lower.
"And these are the kinds of numbers that are consistent with an economy that is either near recession or perhaps is already in one."
Vest expects the unemployment number to continue rising because claims for unemployment increased last year.
"I don't think it (unemployment rate) will get as high as 8 or 9 or 10 percent. I don't expect anything like that. But I wouldn't be surprised to see 6 percent before it settles," he said.
"There will be rounds of layoffs as we go forward, and I think it's going to affect nearly every industry, with the possible exception of the health-care industry. Health care is immune from business cycles."
Frances Griego, an economist with the Department of Commerce's research administration, said December's 4.7 percent seasonally adjusted unemployment rate is not worrisome, and Vest agreed.
Griego said, "We believe it was expected (to rise) because it had been extremely low several months earlier."
Phoenix came in with the lowest rate, at 4.1 percent, in December.
But the state's unemployment rate is the highest since it last hit 4.7 percent in October 2005 and puts Arizona fairly close to the national average of 5 percent.
Arizona hit an all-time record-low unemployment rate of 3.3 percent in September and its highest rate, 11.5 percent, in February 1983.
Unemployment rates rose throughout the state, especially in Yuma.
The Yuma metro area, which is in the midst of its annual produce harvest, saw its rate jump from 13.6 percent in November to 16.1 percent in December. Its December rate was 15 percent higher than a year earlier.
The Kingman area saw its rate rise from 5.1 percent to 6 percent. Other areas of the state saw about half a percentage-point increase.
Dennis Doby, acting research administrator with the Department of Commerce, said, "We're seeing more people looking for work, and it may be taking them more time to find work."
The state's new jobs last month were mostly in services, especially retail and tourism. The holiday season created 4,700 retail jobs in the state. Two other sectors, professional and business services, and educational and health services, also grew.
The two biggest losses in December were in construction and goods-producing jobs. Overall, construction lost 24,400 jobs last year for a 24 percent drop, and manufacturing lost 22,200 jobs for a 22 percent drop.
Doby pointed out that not everything was on the downturn.
"State personal income is still positive," he said. "Over the (fiscal) year, employment growth is still positive. It's a lot weaker than it was a year ago, mind you, but it's still in positive territory."
While the state gained 10,100 jobs in December to hit a new record of 2.76 million, the number was a scant 1.1 percent higher than the same time a year earlier, the Arizona Department of Commerce reported Thursday.
"This is an economy that is losing momentum," said Marshall Vest, director of the Economic and Business Research Center at the University of Arizona. "We're still adding jobs, but two years ago employment growth touched 6 percent. Today, it is 1 percent, and it's headed lower.
"And these are the kinds of numbers that are consistent with an economy that is either near recession or perhaps is already in one."
Vest expects the unemployment number to continue rising because claims for unemployment increased last year.
"I don't think it (unemployment rate) will get as high as 8 or 9 or 10 percent. I don't expect anything like that. But I wouldn't be surprised to see 6 percent before it settles," he said.
"There will be rounds of layoffs as we go forward, and I think it's going to affect nearly every industry, with the possible exception of the health-care industry. Health care is immune from business cycles."
Frances Griego, an economist with the Department of Commerce's research administration, said December's 4.7 percent seasonally adjusted unemployment rate is not worrisome, and Vest agreed.
Griego said, "We believe it was expected (to rise) because it had been extremely low several months earlier."
Phoenix came in with the lowest rate, at 4.1 percent, in December.
But the state's unemployment rate is the highest since it last hit 4.7 percent in October 2005 and puts Arizona fairly close to the national average of 5 percent.
Arizona hit an all-time record-low unemployment rate of 3.3 percent in September and its highest rate, 11.5 percent, in February 1983.
Unemployment rates rose throughout the state, especially in Yuma.
The Yuma metro area, which is in the midst of its annual produce harvest, saw its rate jump from 13.6 percent in November to 16.1 percent in December. Its December rate was 15 percent higher than a year earlier.
The Kingman area saw its rate rise from 5.1 percent to 6 percent. Other areas of the state saw about half a percentage-point increase.
Dennis Doby, acting research administrator with the Department of Commerce, said, "We're seeing more people looking for work, and it may be taking them more time to find work."
The state's new jobs last month were mostly in services, especially retail and tourism. The holiday season created 4,700 retail jobs in the state. Two other sectors, professional and business services, and educational and health services, also grew.
The two biggest losses in December were in construction and goods-producing jobs. Overall, construction lost 24,400 jobs last year for a 24 percent drop, and manufacturing lost 22,200 jobs for a 22 percent drop.
Doby pointed out that not everything was on the downturn.
"State personal income is still positive," he said. "Over the (fiscal) year, employment growth is still positive. It's a lot weaker than it was a year ago, mind you, but it's still in positive territory."
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Labels: . Arizona, unemployment
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