Arizona monthly job gains fall below average

Business News | 7 Nov |

Arizona monthly job gains fell below average in September.

Arizona added 3,700 seasonally-adjusted jobs over the month in September, up from 1,700 in August, but far below the very strong gain of 26,000 in July. That was also below the average monthly job change during the five years before the pandemic began (6,300 per month).


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Professional and business services added the most jobs in September (up 2,700), followed by education and health services (up 2,400), other services (up 2,400), manufacturing (up 2,000), natural resources and mining (up 200), and financial activities (up 200). Those job gains were partially offset by losses in government (down 2,100), construction (down 1,700), leisure and hospitality (down 1,300), trade, transportation and utilities (down 700), and information (down 400).

Compared to February 2020, Arizona jobs were up by 95,500 in September. During that period, the strongest jobs gains were in trade, transportation and utilities, manufacturing, education and health services, financial activities, construction, and professional and business services (Exhibit 1).

Jobs in government and leisure and hospitality remained well below their February 2020 level in September.

Exhibit 1: Arizona Jobs by Industry, Change From February 2020 to September 2022, Seasonally Adjusted, Thousands

The state’s seasonally-adjusted unemployment rate ticked up from 3.5% in August to 3.7% in September. That was slightly above the U.S. rate of 3.5%. Even so, the state’s labor market remains very tight (Exhibit 2).

Exhibit 2: Arizona and U.S. Unemployment Rates, Seasonally Adjusted, Percent

Job gains in the Phoenix MSA (Maricopa and Pinal counties) were solid in September, with an increase of 6,400 on the heels of a slight decline in August.

From February 2020, Phoenix has added 97,300 jobs as of September. The strongest growth was in trade, transportation and utilities, professional and business services, education and health services, manufacturing, financial activities, and construction (Exhibit 3).

Jobs in government, leisure and hospitality, other services, and natural resources and mining were below pre-pandemic levels in September.

Exhibit 3: Phoenix MSA Jobs by Industry, Change From February 2020 to September 2022, Seasonally Adjusted, Thousands

Job growth was especially weak in Tucson in September, with a decline of 5,600. Weakness was concentrated in leisure and hospitality, government (primarily state and local), education and health services, and trade, transportation, and utilities.

With the setback in September, Tucson has replaced 89.7% of the jobs lost during the first two months of the pandemic. Exhibit 4 shows how the recovery has played out across sectors. Note that trade, transportation, and utilities has generated by far the most jobs, followed by manufacturing. In contrast, professional and business services has lost the most, followed by government, information, leisure and hospitality, construction, and education and health services.

Exhibit 4: Tucson MSA Jobs by Industry, Change From February 2020 to September 2022, Seasonally Adjusted, Thousands

 

George W. Hammond, Ph.D., is the director and research professor at the Economic and Business Research Center (EBRC).

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