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Tucson jobs fell by 1,800 in December

Metro Tucson inexplicably lost about 1,800 jobs from November to December and ended 2016 with only .4 percent more jobs than 2015, the Arizona Office of Economic Opportunity reported Thursday. 

The drop is surprising because from 2010 through 2014, the region averaged about 700 new hires in December when employers usually gear up for the holidays. In December 2015, local employers added about 1,500 jobs.

Also, metro Tucson has been one of Arizona’s leading job gainers in recent months and over the past two years has been treated to a steady stream of job announcements, including hires by Comcast, C3/CustomerContactChannels, Caterpillar, Raytheon, Vector Space Systems and other companies.

“I think we’re just going through a bit of a lull after a stronger start to the year (2016). At this point, I don’t see it indicating severe longer term problems, but we’ll have to keep an eye on it,” said George Hammond, a University of Arizona economist who closely tracks Tucson numbers.

Doug Walls, research administrator for the state office that issued the report, said, “We are seeing some job declines in retail and (private) educational services in the Tucson area, followed by below average gains in leisure and hospitality… We are seeing an overall slowdown in positive growth for the state. So this isn’t a unique trend for Tucson.”

As for the weak .4 percent job growth for the year, Walls explained that Tucson had unusually robust hiring in November and December of 2015, making it more difficult to exceed those numbers in 2016.

The next report from the Office of Economic Opportunity, on March 9, should show a more accurate and maybe more positive picture after the 2016 numbers are revised and refined.

Laura Shaw, spokeswoman for Sun Corridor Inc., a regional economic development organization, pointed out that it is too early to see the results of most recent job announcements, such as Raytheon’s announcement last November that it plans to hire 2,000 over the next five years.

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“It is hard to see one bulk job announcement reflected in job reports only a few months later,” she said.

Two call centers, Alorica and Afni, Inc., announced plans this month to hire almost 500 in Tucson over the next year.

Retail hurting

Retail is especially showing distress throughout the state and is a major reason Tucson is losing or not gaining jobs as fast.

The broad trade, transportation and utilities sector that is mostly retail is the state’s largest employment sector, with about half a million workers. The group normally gains about 5,400 jobs in December statewide. But in December 2016 it  lost 600 jobs — the first December losses in at least a decade. Arizona's retail job growth remained flat for the year.

“We are seeing the retail trade industry in transition as brick and mortar stores are competing more with online retail competitors,” Walls said.

For all of 2016, metro Tucson lost 1,100 retail jobs, or 2.5 percent of the positions in that sector here.

Leisure and hospitality, another sector that used to add jobs late in the year in the more winter-friendly climates of Tucson and Phoenix, shrunk statewide in December for the third year in a row. The sector, which includes hotels, bars and restaurants, lost 700 jobs in December but ended up 10,300 jobs ahead at the end of the year.

Of course, it is too early to say whether Arizona’s minimum-wage increase is hurting those retail and hospitality jobs, Walls said. Voters last November approved a raise to $10 an hour (from $8.25) effective Jan. 1. There have been occasional news reports about small  businesses planning to shut down or lay off workers because of the law.

Arizona’s average earnings had already been rising, Walls said. The state’s average hourly rate of $24 at the end of 2016 reflected a 3.3 percent gain over the year – better than the U.S. gain of 2.7 percent, Walls said.

That could be because Arizona has been adding better-paying jobs and that employers are having to compete more for workers in certain fields. 

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Unemployment rates fall

Arizona’s unemployment rate dropped to 4.8 percent in December  -- the lowest in nine years -- from 5 percent in November. That is almost even with the latest U.S. unemployment rate of 4.7 percent.

Unemployment rates are based on household surveys (1,200 households in Arizona)  and indicate the percentage of people employed or looking for work, and not those who have given up.

Pima County’s unemployment rate fell to 4.3 percent from 4.4 percent in November, also the lowest in nine years.

Arizona ended the year with 32,000 more jobs (1.2 percent) than it had at the beginning of the year. Prescott again led the state with the largest over-the-year job percentage growth, an addition of 3,100 jobs or five percent. Metro Phoenix ended up with 27,500 more jobs, or 1.4 percent in 2016.

While Arizona’s job growth has slowed — it was 2.8 percent at the end of  2015 — compared with 2014, Walls said Arizona is now entering its seventh consecutive year of job growth.

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