George Hammond, EBRC Director and Research Professor
Arizona seasonally-adjusted nonfarm payroll jobs dropped by 3,700 in March, after a revised increase of 10,900 in February. The preliminary estimate for February showed growth of 11,700 jobs.
Over-the-month job losses were driven by leisure and hospitality (down 4,700), other services (down 1,300), professional and business services (down 800), government (down 300), information (down 100). Those losses were partially offset by gains in education and health services (up 1,200), construction (up 1,000), manufacturing (up 700), trade, transportation, and utilities (up 400), and financial activities (up 200). Jobs were unchanged in natural resources and mining.
Arizona’s seasonally-adjusted unemployment rate dropped to 3.3% in March, down from 3.6% in February. The March reading was the lowest on record (going back to 1976) and was lower than the U.S. at 3.6% (Exhibit 1).
Exhibit 1: Arizona and U.S. Unemployment Rates, Seasonally Adjusted
While Arizona jobs have regained their prior peak, there is still a lot of variation across industries (Exhibit 2). Government and leisure and hospitality jobs remained far below their pre-pandemic levels in March. Government jobs (primarily local government) were 21,200 below and leisure and hospitality jobs were 19,900 jobs below. Education and health services were still down 4,500, followed by information (down 1,400), other services (down 1,200), and natural resources and mining (down 300).
In contrast, trade, transportation, and utilities jobs were up 54,900 in March, followed by financial activities (up 11,100), construction (up 6,800), manufacturing (6,400), and professional and business services (up 2,600).
Overall, Arizona jobs were up 33,300 jobs from February 2020 to March 2022.
Exhibit 2: Arizona Jobs by Industry, Change From February 2020 to February 2022, Seasonally Adjusted, Thousands
There also remains a lot of variation in job recovery rates across Arizona’s metropolitan statistical areas (Exhibit 3). The current estimates suggest that only three of the state’s seven metropolitan areas have replaced all of the jobs lost during the February to April 2020 period: Lake Havasu City-Kingman, Phoenix, and Prescott. As of March 2022, Sierra Vista-Douglas replaced 72.7% of the jobs lost early in the pandemic, Tucson replaced 83.1%, Yuma replaced 91.5%, and Flagstaff replaced 96.9%.
The case of Yuma is slightly different from Sierra Vista-Douglas, Tucson, and Flagstaff. After recovering fully from the pandemic in mid-2021, jobs have again fallen below their February 2020 level in subsequent months.
Exhibit 3: Arizona Job Replacement Rates, Seasonally Adjusted
