Arizona experiences breakneck job growth, but inflation puts gains at risk

Business News | 16 Dec, 2021 |

The Bureau of Labor Statistics released new unemployment data for Arizona, revealing the state’s unemployment rate has declined for the fourth month in a row.

In October 2021 the rate fell to 5.2%, which was a full percentage point down from two months earlier. This rate is also about one-third of what the unemployment was at Arizona’s peak during the pandemic’s proliferation in 2020.


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The state’s rate, however, was still higher than the national average. The nation’s unemployment rate was at 4.6% for the month of October, down from COVID-19 spike in March 2020 which was at 5%.

“Last year, there were 21 million unemployment insurance claims before the Thanksgiving holiday. Today, there were 2.4 million,” President Joe Biden said. “This is a historic jobs recovery: 5.6 million jobs created since I took office.”

Arizona mirrors this tremendous national trend in job creation. The week before Thanksgiving 2020 there were 404,748 jobless claims in Arizona, and this week there were only 19,067. In October there were 3.65 million people in the Arizona job force, which was the most since 1976.

The increase in jobs in Arizona was across nearly every category. The largest increase was in the leisure and hospitality industry, which took a beating due to pandemic-induced travel restrictions, lockdowns, and other public health measures enacted to slow COVID-19’s spread. The industry saw a 17.6% increase in jobs since last year.

Looking to other sectors, there was a 6.4% increase in professional and business service jobs, a 5.5% increase in trade, transportation, and utility sector jobs, and a 1.3% increase in construction jobs. The number of government jobs remained approximately the same and information jobs declined by 0.9%. Despite these variations among sectors, the overall gains have been impressive.

According to the White House, improvements in the job market have helped drive increases in wages and disposable income. However, those gains have been tempered by a surge in inflation, and Arizona is no different. Prices for almost everything in the Phoenix metro area are on the rise, and it is experiencing higher inflation than the national average. The consumer price index rose 6.2% from October 2020 to October 2021 in Arizona, with energy costs on the rise at 23.3%, high food prices, and the price of gasoline up 46.8%.

 

Author: Flannery Sloan, Arizona Junior Fellow. This story originally was published at Chamber Business News.

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