State jobless rate highest in nearly 30 years
Published: September 16, 2010 at 5:32 pm
Arizona’s jobless rate has reached heights not seen in nearly three decades.
But while the situation is grim, a closer look shows that it is not as dire as it may appear.
For one, the year-to-year job loss rate has considerably slowed down. That is, the economy isn’t shedding as many jobs as it did in 2009, which tends to confirm what economists have been saying – that the state’s economy is recovering, albeit at a very slow pace.
The jobless rate for August reached 9.7 percent, the highest since the early 1980s.
The figure is slightly higher than July’s 9.6 percent, which is also currently the nation’s unemployment rate.
The last time Arizona’s employment nosedived as much was in 1982 and 1983, when the jobless rate hovered at 11.6 percent.
The current jobless rate also stands in stark contrast to the situation in 2007, when unemployment was a mere 3.8 percent.
Still, the year-to-year job loss rate has considerably slowed down.
All told, the state gained 28,200 jobs in August compared to the month before, but the bulk of that increase took place in the government sector and those were mostly in education.
That means the gains reflect the seasonal changes that can be attributed to school openings, which means these are jobs that have existed before, such as bus drivers and cafeteria workers.
In the meantime, the private sector shed 800 jobs during the same period, although some industries, like construction and mining, added jobs.
“Things haven’t picked up as we expected and most of this private sector loss is what’s making Arizona look bad in the month of August,” said Aruna Murthy, director of economic analysis with the Arizona Department of Commerce. “For things to pick up, people need to start spending a lot more than they have been spending historically. In order for the public confidence to come up we need to see gain in job numbers.”
There are some glimmers of good news: Year-to-year figures indicate that construction appears to be stabilizing. For the first time in 28 months, the sector gained jobs starting last January.
But while August typically shows strong job gains compared to July, the economy added fewer jobs this time compared to previous years.
The leisure and hospitality industry shed 4,000 jobs, an “unusual” loss since this is a sector where gains are generally seen this time of the year.
But Murthy cautioned against drawing hard conclusions from the data after reporters asked whether the boycott against Arizona for passing SB1070 might have played a part in the job loss.
“It’s just one month,” Murthy said. “I wouldn’t read too much into it.”
As can be expected, the data reflected good and bad news.
Since August of last year, manufacturing has lost 2,300 jobs.
Meanwhile, construction is down 9,000 jobs from last year.
The information and financial sectors are down by 2,500 and 5,900 jobs, respectively.
But the natural resources and mining sector added a modest 1,000 jobs during the same period.
Also, the transportation and utilities sector gained 7,700 jobs.
With 8,200 additional jobs, the professional and business sector showed the most improvement.