With Arizona Layoffs Slowing, State’s Economic Outlook is Solid, Experts Say Article originally posted on AZ Central on April 1, 2024 Arizona’s job market has been solid lately, and it’s showing up in fewer layoffs. Both the number and magnitude of major layoff announcements declined sharply in the first quarter of 2024 compared with the same three months of 2023. Some 21 employers reported layoffs to Arizona officials in the most recent quarter, affecting 1,395 jobs, according to the state azjobconnection.gov website. That compares with 27 layoffs totaling 2,834 positions during the same quarter last year. The biggest announcement so far this year has been American Airlines announcing a cut to its statewide staff by 335 positions, disclosed in January. The largest layoff announcement in the first quarter of 2023 was 968 job reductions at Lucid Motors, the manufacturer of luxury vehicles in Casa Grande. Employers with 100 or more full-time workers generally must give employees 60 days of notice of facility closings or mass layoffs. Many affected workers find new jobs However, layoff announcements don’t necessarily lead to the exact same number of actual job cuts. For instance, Lucid later said it re-employed most of those people and in January marked an expansion of its highly automated Casa Grande factory, where it will start making electric SUVs to complement the electric sedans that it already produces there. Lucid is Pinal County’s largest nongovernmental employer. American Airlines said it continued to provide employment and pay to the affected workers through March 30. Those who haven’t found other jobs with the airline are being offered outplacement help and severance pay, the company said in a response to The Arizona Republic. None of the affected individuals works at an airport but, rather, in customer support. American is in the process of creating a new “customer success” team that is providing elevated support to customers with complicated travel needs. All affected employees were offered positions in this new group. The company didn’t disclose how many have been reassigned. The improving layoff backdrop corresponds with fading recession anxiety, with a group of large-bank economists now seeing a 30% chance of a recession this year, down from 50% previously. Metro Phoenix showing extra resilience Another notable change so far this year reflects the proportion of layoff announcements around metro Phoenix compared with the rest of the state. A year earlier, at least 90% of statewide job losses were concentrated in metro Phoenix, including Pinal County. This year, the Phoenix area accounted for closer to 53%. A small number of companies didn’t disclose the local geographic impact of their layoff announcements. Arizona’s economy has been performing well and with consistency, ranking eighth among the states for job growth in both 2022 and 2023 and sixth so far this year, said Lee McPheters, an Arizona State University economist. “Basically, this is what a soft landing looks like,” he said, noting that the Federal Reserve continues to apply brakes. “The economy is slowing, but there is still growth.” Overall, metro Phoenix accounts for roughly 75% of nonfarm statewide jobs, according to the Arizona Department of Economic Security. The Maricopa County unemployment rate as of February stood at 3.2%, compared with 4.1% for Arizona overall and 3.9% nationally. Arizona now counts nearly 3.24 million nonfarm jobs. “The outlook is for sustainable but slower growth,” McPheters said. “So there will be layoffs, but that is what is expected in a dynamic economy feeling the bite of tight monetary policy.”