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Arizona's jobless rate drops to 5% amidst robust hiring

Arizona’s unemployment rate dipped to 5 percent in March from 5.1 percent in February as 2017 continued to bring robust hiring in the state, particularly at restaurants and bars.

About 20,000 new people got jobs in each of the first three months of the year, compared with about 5,000 per month in the first quarter of 2016, said Doug Walls, research administrator at the Arizona Office of Economic Opportunity.

“As the unemployment rate reaches almost a decades-low level, we are seeing individuals more optimistic about their chances of getting into the labor force and obtaining employment,” he said.

Tucson’s unemployment rate dropped to 4.4 percent in March, from 4.7 percent in February — below the statewide average. That was also due to particularly strong hiring in the leisure and hospitality industry.

That sector led others by adding 19,500 jobs over the year in Arizona, including 3,400 in metro Tucson.

Tucson job growth lags rest of state 

Metro Tucson continues to add jobs but our job growth is among the slowest in Arizona, likely in part due to the unemployment rate already being lower than the rest of the state.

Tucson added 2,400 jobs over the year (March to March). The retail trade, professional and business services, mining and government sectors all lost jobs over the year but they were offset by a gain of 3,400 positions in leisure and hospitality.

Some other sectors that added jobs over the year in Tucson included business support services, 900 jobs; health care, 900 jobs, and aerospace products and parts manufacturing, 700 jobs.

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But Tucson’s over-the-year job growth was only 0.6 percent. That put it in a tie with the Sierra Vista-Douglas area as the slowest in the state —  behind the Phoenix area (2.7%), Arizona (2.1%), Yuma (2%), Prescott (1.8%), U.S. (1.5%), Lake Havasu City-Kingman, (1.3%) and Flagstaff (0.8%).

Local officials continue to tout Tucson’s brief status as a national job leader last year, even though the underlying statistic was revised downward last month. In his March "State of the City" speech, Tucson Mayor Jonathan Rothschild said Bloomberg had reported Tucson had the “third-fastest job growth rate of any metro area in the country.”

Fact check: Bloomberg did report in August that Tucson had a 4.2 percent job growth in July, compared with the previous year, and that put it third in the nation. But that was for metros of 500,000 or more.

And after the numbers from the U.S. Bureau of Labor Statistics went through their annual revision in March, that growth was downgraded to just 2.2 percent in July – still a respectable 7,700 job gain but not a national leader. 

Arizona’s new minimum wage law

Arizona’s minimum wage in January jumped to $10 per hour from $8.05 due to a proposition voters approved by 58 percent last year. Critics predicted it would particularly hurt low-wage jobs and lead to layoffs..

Yet leisure and hospitality jobs have grown faster than any other sector: 19,500 jobs over the year, comparing March 2017 to March 2016. The majority of those jobs, 18,000 were at food services and drinking places.

Walls said three months of data is not enough to accurately judge the effect of the new law.

One measure, though, shows Arizonans are earning more. Arizona’s average hourly earnings grew 4.1 percent over the year to $24.7 in March, compared with a 2.8 percent growth for the U.S., he said. The U.S. earnings reached $26 in March.

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