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Arizona adds tens of thousands of jobs in May

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Numbers still need adjustments, but state appears on the mend

New figures Thursday show the state’s seasonally adjusted employment rate dropped from 13.4% in April to just 8.9% in May.

But Doug Walls, the research administrator for the Office of Economic Opportunity, acknowledged the real number could be higher.

He said that’s the result of some “misclassification” errors by the federal Bureau of Labor Statistics, the agency that puts together both the state and national numbers.

Specifically, Walls said BLS listed some people as employed when they were actually on furlough or had been laid off.

So what’s the real number? Walls said BLS won’t release that until Friday.

But revisions to the April numbers could give some idea.

On paper, the April jobless rate was 13.4%. But Walls said when BLS made the required adjustments, the more realistic rate was 17.1%.

Still, the state still counts the 13.4% as its official rate for April. And the 8.9% will stand on Arizona records for May, regardless of any adjustments BLS makes.

That’s not to say the state’s employment situation did not improve – in some cases, it did significantly. And much of the reason has to do with timing.

The May numbers are based on a household survey done in the second week of the month, asking people whether they are working and, if not, whether they are looking for work. That meant the week starting with May 11, a Monday.

But that also was the first day that Gov. Doug Ducey agreed to allow restaurants and bars to resume dine-in service. And the results are remarkable: Food service and drinking places added 42,700 jobs over the same time a month earlier.

The other big gainer, Walls said, is in employment in beauty salons and barbers, which picked up 8,400 jobs over April. Here, too, timing is everything, as Ducey agreed to allow them to reopen on May 8.

Still, the Arizona economy is not where it was a year ago.

Even with the monthly gains, employment at bars and restaurants is still 18.2% less than a year ago.

The hospitality industry – hotels and motels – remains crippled. It shed another 6,500 jobs in May, with year-over-year employment just 52% of where it stood in 2019.

Retail trade is starting to pick up as more stores open and more people feel comfortable going shopping, adding 7,400 jobs in May. But that’s still 11,800 than last year.

One industry that appears to have been largely unaffected is construction, which not only added jobs in May but with slightly more workers than the previous year.

Still, Walls cautioned, there may be headwinds.

He said that only about 2,800 permits were granted in May for new home construction, down about 29% from a year ago.

There may be another reason to question the reliability of the jobless numbers.

Walls noted that the response rate to the monthly household survey, which was 83% in February, was just 67% in April. The May response rate will be reported on Friday.

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