Western Blue Chip: Arizona had weakest labor market performance of all states in March

All but three states reported losses in nonfarm employment in March 2009 compared to 12 months earlier, according to figures released by the U.S. Bureau of Labor Statistics. Nationally, the economy lost 4.8 million jobs over-the-year in March, and payroll employment fell by 3.6 percent. Only North Dakota, Louisiana, and Alaska escaped job losses, recording gains of less than one percent over the previous 12 months. Arizona's over-the-year job losses were the worst of all states, with employment decreasing by 6.9 percent from a year ago

All but three states reported losses in nonfarm employment in March, according to figures released by the U.S. Bureau of Labor Statistics for March of 2009 compared to 12 months earlier. Nationally, the economy lost 4.8 million jobs over-the-year in March, and payroll employment fell by 3.6 percent. Only North Dakota, Louisiana, and Alaska escaped job losses, recording gains of less than one percent over the previous 12 months.

Arizona's over-the-year job losses were the worst of all states, with employment decreasing by 6.9 percent from a year ago. Since March of 2008, the Grand Canyon State has seen payrolls fall by 183,100 workers. Arizona's woes were distributed across several sectors of the economy.

Arizona had the worst percentage job losses of any state in construction (-27.9 percent) and trade (-7.5 percent), and the state was second-worst in employment losses in professional and business services (-11.8 percent) and hospitality and leisure (-6.7 percent). Although no states lost jobs in education and health services, Arizona's gain over-the-year in March was second weakest (+0.5 percent) behind Rhode Island, which reported no growth in this sector.

Other Western states among the ten weakest labor markets were Oregon (-5.3 percent), Nevada (-5.3 percent), and Idaho (-5.2 percent). California's labor markets ranked 14th worst in March, with a decrease in employment of 4.2 percent. Several other Western states lost jobs at a pace below the national average of 3.6 percent, including Washington (-3.3 percent), Colorado (-3.1 percent), Utah (-2.6 percent), Montana (-2.2 percent), New Mexico (-1.9 percent) and Texas (-1.1 percent).

Until March, Wyoming had ranked as the fastest growing labor market for 18 consecutive months, as measured by over-the-year percentage change. But nonfarm employment dipped by 200 jobs in March compared to a year earlier, as the state lost jobs for the first time in six years. California has lost the most jobs (637,000) over the past 12 months. Florida's losses for the period exceed 400,000 jobs, and more than 200,000 jobs were lost in Michigan, North Carolina, Ohio, and Illinois.

Western States Employment Outlook

As job losses accelerate and unemployment rates rise, the Western Blue Chip analysts are steadily revising the forecast figures for their respective states. The Arizona job growth outlook has turned more solidly negative among the panel members, with a consensus forecast this month that employment will decrease by 2.8 percent in 2009.

Several panel members are now projecting the decrease will exceed 5 percent, with the Arizona Department of Commerce the bleakest of all — their revised forecast this month calls for a decline of 5.6 percent in employment for the year. The bears are also emerging from the woods in Oregon, where the Oregon Executive Department foresees annual jobs losses at a 5.3 percent pace.

Conerly Consulting projects a dip of 4.7 percent for this year, pulling the Oregon consensus down to match the 2.8 percent job loss figure for Arizona. In Nevada, the Department of Employment, Training and Rehabilitation projects annual job losses at a 5.4 percent pace. The Nevada job growth outlook also is among the weakest in the West, with a consensus for 2009 of a decline of 1.6 percent.

Three states (Idaho, Montana and Wyoming) still have 2009 consensus employment growth forecasts in the positive range for this month. But all three lost jobs in March. With national unemployment and job losses expected to continue, it is likely that Blue Chip forecasters will be reducing their forecasts several more times before this year is over.