George Hammond, EBRC Director and Research Professor
Arizona’s Unemployment Rate Plunged Again in December
Arizona’s seasonally-adjusted unemployment rate plummeted again in December. The state rate has fallen from 6.8% in June 2021 to 4.1% in December (Exhibit 1), which was the lowest since December 2007. That was slightly above the national rate of 3.9% but below its February 2020 level of 4.9%. The non-seasonally adjusted state rate was 2.8%. The labor market is really tight.
Exhibit 1: Arizona and U.S. Unemployment Rates, Seasonally Adjusted
Arizona added 11,600 seasonally-adjusted jobs over the month in December. That was a bit faster than November growth of 6,500 (revised down from 8,600 in last month’s release). As of November, Arizona more than replaced all of the jobs lost during the February to April 2020 period (Exhibit 2). In other words, Arizona jobs hit a new high in November.
Job gains in December were widespread across industries. The largest gains were in leisure and hospitality (up 3,300); trade, transportation and utilities (up 2,800); education and health services (up 1,900); construction (up 1,200); and professional and business services (up 1,100). With the exception of financial activities (down 800) all other sectors were up by modest amounts.
Exhibit 2: Arizona’s Jobs Reached a New High in November and Continued Growing in December, Nonfarm Payroll Jobs, Seasonally Adjusted
Most metropolitan areas in the state posted employment levels well above February 2020 (Exhibit 3). The two exceptions at this point are Flagstaff and Tucson, which have job replacement rates of 89.7% and 85.0%, respectively.
Exhibit 3: Share of Jobs Lost During the Pandemic that Have Been Replaced as of December 2021, Arizona Metropolitan Areas
Exhibit 4 shows the change in seasonally-adjusted jobs by industry from February 2020 to December 2021. Government jobs (primarily local government) were down 18,500, followed by leisure and hospitality (down 17,300), information (down 4,700), and other services (down 1,100).
Trade, transportation, and utilities jobs were 44,000 above February 2020 in December. Transportation, warehousing, and utilities jobs were up 31,100 and retail trade jobs were up 10,000. Education and health services; professional and business services; manufacturing; construction; and natural resources and mining jobs were modestly above February 2020.
Exhibit 4: Arizona Jobs by Industry, Change from February 2020 to December 2021, Seasonally Adjusted, Thousands
