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Metro Tucson sees 2nd highest job growth in Arizona

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Metro Tucson sees 2nd highest job growth in Arizona

Employment report: 4.2% more jobs added over past year

  • Office of Employment & Population Statistics

Metro Tucson recorded a 4.2 percent growth in jobs over the past year, the second highest in the state.

Those 14,900 payroll, non-farm jobs were added from July 2015 to July 2016, bringing the total to 366,300. Only Prescott, with 3,800 new jobs, had a higher percentage growth — 6.4 percent, according to a monthly Arizona jobs report released Thursday.

Although metro Phoenix gained 58,600 jobs, the growth in that heavily populated area was only 3.1 percent. The state overall gained 76,100 jobs or 3 percent. Both of those are better than the nation's 1.7 percent growth.

Even so, Arizona’s unemployment rate rose to 6 percent in July. That was the fourth consecutive monthly increase, though the increase from June was small, just two-tenths of a percentage point.

Tucson’s growth was mostly in manufacturing, health care and financial activities, said Doug Walls, a research administrator with the Office of Economic Opportunity, which recently changed its name from the Office of Employment and Population Statistics.

George Hammond, director of the Economic and Business Research Center at the University of Arizona, cautioned that the data is preliminary and said past revisions have substantially reduced job growth.

“I think Tucson is accelerating for a variety of reasons,” he said in an email.

“One is that we are now experiencing less federal fiscal drag compared to the 2013-2014 period. The past federal fiscal drag reflected reduced federal spending locally due to the sequester and other federal budget cuts,” Hammond said.

“While federal spending does not appear to be rising, it has stabilized and that means less drag. Federal government activity means a lot more for Tucson than for the state, Phoenix, or the nation as a whole,” he said.

“In 2013, federal government activity (civilian and military) accounted for 7.8 percent of Tucson’s GDP (gross domestic product), compared to 3.9 percent for the state and 3.6 percent for the U.S.”

Some recent relocation decisions, such as Comcast and Homegoods, are showing impacts, Hammond said.

Comcast in May opened a 100,000-square-foot call center that will house 1,100 employees. And Homegoods opened a new distribution center in the spring and planned to hire 400 this year.

The state report shows the strongest employment sectors in metro Tucson to be:

  • Government: 66,700 total jobs in July;
  • Private education and health services: 65,700
  • Trade, transportation and utilities (mostly retail): 60,400
  • Professional and business services: 52,200
  • Leisure and hospitality: 43,000

Arizona’s seasonally adjusted unemployment rate of 6 percent in July is the same as it was in July 2015. But last month’s rate is higher than the national rate of 4.9 percent.

The state lost 14,800 jobs in July, largely because of typical seasonal job losses in schools.

Economists prefer to look at over-the-year numbers, and Arizona there continues to do well, with a 3 percent gain over the year. The 76,100 new jobs were all from private businesses. Government jobs fell over the year by 700.

The largest statewide gains were in private education and health services, 19,000 new jobs; professional and business services (such as banking), 15,300; and trade, transportation and utilities, 11,200.

Walls said the rise in the unemployment rate could be because more people are looking for jobs and not losing jobs. The total number of people claiming unemployment insurance in Arizona fell to 35,654 in July, compared with 37,398 a year earlier.

Pima County's unemployment rate has been steadily increasing all year, from 4.9 percent in January to 5.8 percent in July.

The unemployment rate is based on a household survey asking if people are working or looking for work.

The report also showed that metro Phoenix had an average wage and salary growth of 2.4 percent in July, compared with a year earlier. While that was lower than the U.S. average of 2.6 percent, it was the third highest behind Los Angeles and Detroit among large metro areas.

Wage and salary information on metro Tucson was not available.

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