Arizona’s unemployment rate inched up to 8 percent in January when the state shed 45,500 jobs, a state economist reported March 14.
The private sector accounted for a big chunk of those losses, although the government led other sectors in shedding workers.
In comparison, the U.S. jobless rate was 7.9 percent that month.
Aruna Murthy, the state’s director of economic analysis, said the losses are typical in January. Companies, particularly those in retail, tend to ramp up their hiring of temporary workers in the months prior to preparing for the holidays.
But Murthy said the larger trend still looked favorable. January’s figures are below the 10-year average of 58,600 jobs that are lost for the month.
Also, the over-the-year numbers comparing January 2013 to January 2012 showed that Arizona added 47,700 jobs, with the private sector accounting for a majority of those gains.
What’s also encouraging is that all but one of 11 major sectors, especially construction, posted over-the-year gains.
Murthy said updated figures after benchmarking also showed that employment in the private sector appeared to have been growing above 2 percent in the past 18 months.
“[This] is good news. So it means Arizona is continuing to grow,” she said.
Arizona’s over-the-year numbers for the private sector also looked better than the country’s.
But what’s unknown and worries Murthy is the impact of the federal “sequester” cuts on jobs.
She said it’s difficult to predict numbers since the sequestration cuts are phased in. Still, the economist believes that sequestration will likely dampen Arizona’s employment growth.
Its effects will likely be uneven, impacting military spending — and those that rely on it — more so than others, which means the impact will also likely be more regional as communities surrounding bases feel the cuts more strongly than other parts of the state.
“I anticipate a slight decline in the growth rate,” Murthy said. “Overall, it’s a significant amount of cuts that I think it will impact the growth rate to some extent.”
She added she’s worried not just about the potential job losses resulting from the sequestration.
“I worry more for the secondary and tertiary effects that the primary job loss causes,” she said, referring to the overall dampening impact of shrunken incomes on spending power, consumer confidence and other indirect impacts.