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Arizona's Latest Employment Report

Stuart Kinlough/Getty Images/Ikon Images

By Howard Fischer
Capitol Media Services
PHOENIX -- Arizona's seasonally adjusted jobless rate dropped a half point last month, to 7.5%.
Much of the increase in employment in December came in the area of online trade.

That sector has been one of the continued bright points in the economy, not only in Arizona but nationally, as people continue to shift to e-commerce, a trend that has only accelerated with the pandemic and people depending more on having items delivered than going out and looking for them.

But Doug Walls, the research administrator for the Arizona Office of Economic Opportunity, also noted Thursday there were strong month-over-month increases in employment among certain sectors of the retail trade industry.

Department store employment is up 4.1% from November. There also were gains among retailers selling clothing and accessories as well as in furniture stores.
Some of that, he said, is likely due to the holidays. But not all.

``Things are changing,'' said Walls, with brick-and-mortar retailers apparently now better prepared to serve in-person customers.
And perhaps there's something else.

The pandemic has resulted in a situation where people are going out less, spending less on gasoline, and, given the work-at-home trend, possibly buying fewer new clothes as they sit home in sweat pants. In fact, on a national level, personal consumption expenditures dropped a whopping 12.3% between March and April.

But that, then, could lead to some pent-up demand.
``We wouldn't be able to tell why people are spending,'' Walls said.
What he has seen through the pandemic is a shift in the spending mix, with people spending less on services -- think of going out -- versus actual products.

Thursday's jobless report also noted a sharp increase in the number of Arizonans filing for unemployment benefits early this month.

What makes that significant is that the 7.5% jobless rate for December is based on surveys of employers and individuals done in the second week of that month. If there has been a big jump in people laid off since then, as reflected in the request for benefits, that won't show up until the January unemployment rate is announced in early March.

Overall, the state continues to try to gain back the jobs lost since February, right before the COVID-induced recession.

About three fourths of the 282,900 jobs shed by the private sector have been recovered. But the fiscal healing has not been even across the board.

On one hand there's that strong showing in trade and transportation, the sector that includes those warehouse and delivery jobs that support e-commerce. It not only has recovered the 29,800 jobs originally lost but actually added another 9,100 jobs on top of that.
By contrast, the state's construction industry has recaptured just a quarter of the jobs lost. Ditto for the information sector and manufacturing.

From a pure numbers standpoint, the state's leisure and hospitality industry remains the hardest hit. That largely includes bars, restaurants and, to a lesser extent, hotels, resorts and motels.
And things are not getting better, with bars and restaurants losing another 900 workers between November and December.

But as bad as the situation is in Arizona, Walls said it's worse a lot of other places: While the year-over-year decline is 13.3% in the leisure and hospitality industry, it actually is down 22.7% nationally.

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