Arizona jobs: The struggle continues

Annual employment revisions recently issued by the U. S. Bureau of Labor Statistics brought more bad news for the Arizona economy. Preliminary monthly job growth figures had previously indicated improving labor market conditions as the year ended. But the new revisions showed Arizona lost jobs in every month in 2010 (compared to the same month of 2009). That means 2010 marked the third year in a row of job losses, with the construction industry hardest hit with a drop of 17,600, followed by state and local government, which shed 9,900. Lee McPheters, W. P. Carey research economist and director of the JPMorgan Chase Economic Outlook Center, reviews the numbers.

Annual employment revisions recently issued by the U. S. Bureau of Labor Statistics brought more bad news for the Arizona economy. Preliminary monthly job growth figures had previously indicated improving labor market conditions as the year ended. But the new revisions showed Arizona lost jobs in every month in 2010 (compared to the same month of 2009).

Third year of job losses

For the year, Arizona employment was down by 51,900 jobs, or 2.1 percent from 2009, marking the third consecutive year of job losses. Since December of 2007 (the start of the national recession) to December of 2010, the state lost 309,000 jobs, a decline of 11 percent in nonfarm employment. Compared to all other states, Arizona ranked 49th in 2010, based on percentage change in employment.

Arizona was 49th also in 2009 and 46th in 2008, after ranking first in the nation in 2006. Neighboring Nevada was in 50th position in both 2010 and 2009. Only nine states added jobs for the year-as-a-whole in 2010. North Dakota grew most rapidly (2.3 percent) while Texas added the greatest number of jobs (34,800). Employment at the national level declined by 989,000 jobs (-0.8 percent) in 2010 compared to 2009.

Construction down again

The hardest-hit industry in Arizona in 2010 again was construction, down by 17,600 workers, a drop of 13.7 percent from 2009. Since peaking at 2480,000 workers in summer of 2006, construction has lost 140,000 jobs.

The construction industry accounted for more than 9 percent of all jobs in Arizona in 2006, but by 2010, the proportion of construction jobs had fallen to 4.6 percent, the lowest share since 1945. State and local governments shed 9,900 jobs in Arizona last year, to become a second leading source of job losses. The most Arizona jobs added in an Arizona industry were in health care (5,300).

Arizona ranked 46th in January

Preliminary labor market reports available for the states show Arizona's position improved somewhat in January. Arizona employment compared to 12 months before was nearly flat, lower by only 500 workers. Compared to all other states, Arizona ranked 46th. North Dakota led all states with growth of 4.9 percent in January.

Texas again created the most new jobs (241,500). Arizona economy-watchers expect conditions to improve in 2011. The current forecast from the Arizona Blue Chip panel of forecasters calls for an increase of employment of 1.7 percent this year. If the forecast is realized, the year will bring an additional 40,000 jobs. This will be a welcome reversal in a state that has not added jobs over-the-year for 36 consecutive months.