Arizona’s Unemployment Rate Up; Healthy Year-over-Year Job Gains

Article originally posted on Phoenix Business Journal on August 21, 2016

Despite an uptick in the Arizona unemployment rate to 6 percent from 5.8 percent in June, Arizona gained 76,100 jobs year over year, according to the Arizona Department of Administration.

The month-over-month job loss is seasonally normal, and the nearly 15,000 jobs lost in July was less than the post-recession average of 23,500 jobs per month. Arizona’s unemployment rate was also 6 percent in July 2015.

The state still has more than 3 million jobs active in the market, up from 2.9 million a year ago.

The bulk of the job growth, year-over-year, came in education and health services (up 19,000 jobs in July 2016 over 2015) and professional and business services (up 15,300 jobs over 2015). In year-over-year job growth, all sectors reported gains except government (-700) and natural resources and mining (-1,200 jobs). Construction gain 10,800 jobs over 2015, but ranked 5 on the list of sector job growth.

In the Phoenix metro, the unemployment rate was up one-tenth of a percent in July 2016, but four-tenths of a point less than July 2015. The metro has 2.1 million jobs, up from 2.0 million a year ago. In the month-over-month job loss, the Valley only dropped 7,000 jobs, meaning that more jobs were lost elsewhere in the state than in Arizona’s largest market. Phoenix has 70 percent of the state’s jobs, but lost 46 percent of the jobs in July. Tucson lost 3,400, Yuma, Prescott and Flagstaff each lost around 1,000 jobs in July over June 2016.

Advanced industry sectors combined for about 15,000 of the nearly 58,000 private sector jobs gained in 2016 over last year. State, business and economic development leaders have been pressing to increase the AI sectors because jobs from these companies tend to pay more than jobs in the market overall. The high value jobs made up about 28 percent of the new jobs created in July.

Last year, the Phoenix market gained 73,500 private sector jobs in July 2015 over July 2014. However only 25 percent were in the AI sectors.

That 3 percent gain in total AI jobs was noted by Brookings Metropolitan Policy Program in its analysis showing the Phoenix metro is starting to pivot the economy away from consumption industries.