George Hammond, EBRC Director and Research Professor
Arizona jobs are still 122,300 below where they would have been had the pandemic not occurred
Arizona added 7,300 seasonally-adjusted jobs in October, up from a revised increase of 4,700 in September. The preliminary estimate put September job growth at 3,700. The state unemployment rate ticked up to 3.9% on a seasonally-adjusted basis from 3.7% in September. The national unemployment rate was 3.7%.
Education and health services led job growth in October, up 3,800, followed by construction (up 1,300), leisure and hospitality (up 1,300), trade, transportation, and utilities (up 1,000), financial activities (up 1,000), other services (up 600), manufacturing (up 500), and natural resources and mining (up 200). Professional and business services jobs dropped by 1,800 and information jobs declined by 600. Jobs in government were stable over the month. October’s gain of 7,300 was slightly above the state average during the 2015-2019 period of 6,300 per month.
Even though Arizona replaced all of the jobs lost during the early months of the pandemic in late 2021, state jobs are still well below where they likely would have been had the pandemic not occurred. Exhibit 1 shows actual jobs in Arizona compared to where they would have been had the state continued to grow at the average pace during 2015-2019. As the exhibit shows, the gap is still large, at 122,300. If Arizona jobs continue to grow at about the same pace experienced during the 2015-2019 period, they will not recover back to their pre-pandemic trend level. In order to do that, Arizona jobs need to significantly exceed average growth during the pre-pandemic period.
Exhibit 1: Arizona Jobs Remain Well Below Where They Would Have Been Had the Pandemic Not Occurred
Exhibit 2 shows that most of Arizona’s metropolitan statistical areas have recovered all of the jobs lost during the early months of the pandemic. The two exceptions, as of October, were Sierra Vista-Douglas and Tucson. Jobs in Sierra Vista-Douglas were 600 below their pre-pandemic level while Tucson jobs were 2,100 below.
Exhibit 2: Job Replacement Rates for Arizona Metropolitan Statistical Areas
As of October 2022, nine of 11 major sectors in Arizona had recovered all of the jobs lost during the early months of the pandemic (Exhibit 3). The two exceptions were leisure and hospitality and government. Within the government sector, local government jobs accounted for most of the gap. In turn, both local education and non-education jobs contributed significantly.
Exhibit 3: Arizona Jobs by Industry, Change From February 2020 to October 2022, Seasonally Adjusted, Thousands
