The unemployment rate in Arizona has dropped to its lowest level since 1976, data shows.

Arizona added 12,500 seasonally-adjusted jobs over the month in April, up from a 600 job increase in March. The state’s seasonally-adjusted unemployment rate ticked down to 3.4%, the lowest on record going back to 1976.

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Growth in April was driven by private education and health services (up 3,600); trade, transportation, and utilities (up 2,800); professional and business services (up 2,800); construction (up 1,700); leisure and hospitality (up 1,600); government (up 1,200); and natural resources and mining (up 200). Information was stable over the month.

Job gains were partially offset by losses in other services (down 600); financial activities (down 600); and manufacturing (down 200).

In April 2023, Arizona jobs were 165,000 above their pre-pandemic peak. Nearly all industries in the state were above their pre-pandemic level in April, with the exception of government and other services.

For the Phoenix MSA, jobs were up by 151,700 from February 2020 to April 2023, accounting for the majority of the state increase. Government jobs in Phoenix remained significantly below their pre-pandemic level, while other services and natural resources and mining were close to full recovery. Most other sectors were well above February 2020 levels.

Jobs in the Tucson MSA have risen by 3,800 from February 2020 to April 2023, with much more varied performance across industries than for the state or Phoenix. Private education and health services jobs were 2,800 jobs below February 2020 and professional and business services jobs were 2,200 below. Both sectors performed much better in the Phoenix MSA, for reasons which are very unclear.

Similar to Phoenix, Tucson jobs in trade, transportation, and utilities; financial activities; construction; and manufacturing were well above their pre-pandemic level in April.

In April, the Arizona seasonally adjusted unemployment rate dropped to 3.4% (preliminary), an all-time low going back to 1976. Arizona’s rate was equal to the national rate in April. Overall, the state’s labor market remains very tight. That puts pressure on employers seeking to fill open positions and presents abundant opportunities to workers looking to find/change jobs.

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