Arizona Unemployment Rate Remains Unchanged, Higher Than National Average

By Claire Caulfield
Published: Friday, October 19, 2018 - 11:32am

The unemployment rate in Arizona is exactly where it was a year ago, 4.7 percent. The numbers released Thursday show that’s higher than the national average of 3.7 percent.

But the research administrator for the state Office of Economic Opportunity, in announcing the last set of numbers before Election Day, said this isn't a bad sign for the Arizona economy.

"It's not that we're stuck and not going anywhere. It's that we have to look and gauge other metrics in order to get the entire picture,” Doug Walls said. “And what we're seeing from those other metrics in terms of employment and labor force are positive indications for the Arizona economy."

Walls said more people are entering the labor market: from recent graduates and new Arizona residents, to those who weren't looking for work, but now are.

In 11 Arizona counties, the unemployment rate is higher than this time last year, although many changed by only a tenth of a point. Maricopa County currently has the lowest rate: 4.2 percent, in contrast to Yuma’s 19.1 percent unemployment rate.

However Walls said it's the number of jobs created, not the unemployment rate, that provide a better indication of economic health.

He pointed out that private sector employment is up by 11,300 in the past month and by 79,000 in the past year. And year-over-year employment has now been in positive numbers for eight years, back into the administration of Gov. Jan Brewer.

But politicians often point to unemployment numbers to prove economic growth.

Applying the Numbers

“Just out: 3.7 percent unemployment is the lowest number since 1969,'' President Trump tweeted out following the release of the national figures earlier this month.

And Ducey himself has used the number in campaign speeches, pronouncing as recently as last month that "the last time unemployment was this low people were renting their videos from Blockbuster.''

"It's not that we're stuck and not going anywhere,'' Walls said. "We have to look and gauge other metrics in order to get the entire picture.''

That includes the total number of people who are working, which shows jobs are being created.

"One indicator is not going to give you the entire picture,'' Walls said.

In responding to the higher unemployment rate in Arizona, gubernatorial press aide Daniel Ruiz said the focus should be on those other numbers, like the year-over-year growth in employment.

There is another indicator, though.

The Hourly

Average hourly earnings last month in Arizona were $25.67, compared with $27.38 nationally. And one thing that affects earnings is demand: As the jobless rate declines, employers need to pay more to attract and retain talent.

The brightest spot in the economy continues to be the rapidly recovering construction industry.

It tanked in the wake of the recession as the housing bubble burst, with employment going from 244,300 — one job out of every 11 in the state — to just 109,300.

Another 1,200 construction jobs were added in September, bringing year-over-year growth to 16,500. That means one out of every five jobs created in the past year was in construction.

But Walls said there is no reason to believe that Arizona will once again become overly dependent on construction jobs which could dry up the next time the economy goes sour. He pointed out that total construction employment is 165,200, which is only two thirds of that 2006 peak.

Manufacturing employment also remains healthy, particularly in computer and electronic parts where employment is up 9.7 percent in the past year. And Walls said the state's aerospace sector is also doing well.

At the other extreme, employment among retailers selling clothing and accessories shed another 1,000 jobs last month and remains below where it was a year ago. Walls said this industry is particularly susceptible to online competition.

Howard Fischer from Capitol Media Services contributed to this report.

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