Revised Arizona job numbers give metro Tucson less 2018 growth

An annual revision of employment numbers gave Arizona 5,600 more jobs than earlier tallies, but metro Tucson ended up with 2,900 fewer last year than previously reported.

Tucson still gained about 6,100 jobs over the year, according to January numbers reported Thursday by the Arizona Office of Economic Opportunity. But their December estimates gave Tucson an increase of more than 9,000 jobs over the year.

Not only did metro Tucson end up with a smaller increase in the number of jobs but our 1.6 percent job growth (January 2018 to January 2019) put it in last place among Arizona's seven major metro areas. Lake Havasu-Kingman came in first with 3.4 percent and the Phoenix area was second with 3.1 percent.

Arizona and other states base their monthly employment reports on surveys of households and businesses. The employment numbers were revised in February to correspond with a more accurate federal census of actual jobs, an annual process known as benchmarking.

The latest revision also gave Arizona 4,800 more jobs in 2017 than previously estimated but Tucson's 2017 numbers remained unchanged. 

Doug Walls, director of labor market information for the office, said most of the gains appeared in late 2017 and early 2018, with growth slowing throughout the year.

The office also reported that Arizona's unemployment rate rose to 5.1 percent in January from a revised 4.9 percent in December,. Mining and health care jobs have been growing faster than previously reported and the month-long federal shutdown seems to have had virtually no impact on the overall employment picture.

Unemployment rate remains high

Arizona's unemployment rate is the highest since March 2017, when it also hit 5.1 percent. The latest U.S. rate is four percent. 

Only four states – Alaska, West Virginia, New Mexico and Louisiana – have higher jobless rates than Arizona.

But while it sounds alarming to see Arizona's rate remain high, Walls said it is increasing because people are flooding Arizona's job market faster than they can be hired. In other states rates are high because jobs are harder to get.

Arizona ranked third in the nation in the growth of its labor force, which grew by 125,265 last year, as of December.

And the main indicator of mass job losses, initial claims for unemployment insurance, has been steadily falling for more than a decade in Arizona.

"We don't see anything suspicious or concerning, looking at initial claims, that would indicate that more people are losing their jobs," Walls said.

Arizona last year ranked fourth in the nation for population growth and second for its overall increase in nonfarm jobs. The latest numbers show that Arizona gained about 79,300 jobs over the year.

The unemployment rate for Pima County rose to 5.4 percent in January from 4.8 percent in December. It was only 4.7 percent in January 2018. But the labor force grew by about 15,300 last year.

Out of the 6,100 new jobs metro Tucson gained last year, the majority were in state government and state and local public education, 1,500; manufacturing,1,300; health care, 1,200; administrative and waste services, 1,200; and construction, 1,100. Construction had the largest percentage gain, with 6.8 percent, followed by state education, 6.4 percent, and manufacturing, 5.3 percent.

The revision reduced the number of 2018 jobs in metro Tucson from about 384,400 to 381,500.

Some sectors doing better than expected

The revisions showed that natural resources and mining and health care did better than expected in Arizona while construction, professional and business services, leisure and hospitality and manufacturing didn't add as many jobs as previously reported.

Natural resources and mining ended the year with 13,100 jobs, 11 percent more than previously estimated. Health services and non-public education ended up with 4,600 more jobs largely because of health care.

Construction, leisure and hospitality and manufacturing ended with fewer jobs but the change was only one to 1.6 percent. Manufacturing had the largest negative change, losing 2,700 jobs (1.6 percent) to end up with 172,800 jobs.

Federal shutdown scarcely noticed

The partial federal government shutdown from Dec. 22 to Jan. 25 apparently didn't make much of a dent in job numbers. Employees on furlough were still counted as employed.

The number of unemployment claims from federal workers doubled in January. But Walls said that because there are relatively few federal workers (54,700 out of 2.9 million), the effect was minor and had zero impact on the state's unemployment rate.