George W. Hammond, EBRC director and Eller research professor
Arizona job growth revised up to 2.6% in 2023
Arizona added 10,900 jobs over the month in January, up from a revised 7,600 increase in December. The initial estimate suggested the state added 9,200 jobs in December. Arizona’s seasonally-adjusted unemployment rate was 4.2% in January, unchanged from December, and that was above the U.S. rate of 3.7%.
In January, state job gains were driven by trade, transportation, and utilities (up 4,700), private education and health services (up 3,900), professional and business services (up 3,200), construction (up 1,200), government (up 900), and other services (up 700). Jobs were down in financial activities (down 2,600), leisure and hospitality (down 800), and information (down 300). Jobs were stable in manufacturing and natural resources and mining.
Over the year, Arizona jobs were up 81,800 for 2.6% growth. That was above the U.S. rate of 1.8%. As Exhibit 1 shows, private education and health services; trade, transportation, and utilities; construction; and government drove gains. Jobs were down in financial activities; information; and manufacturing.
Exhibit 1: Arizona Net Job Change (Thous.) and 2022 Annual Wages per Worker
With the January data, we have revised (benchmarked) employment data for 2022 and 2023 from the U.S. Bureau of Labor Statistics. The jobs data for Arizona has been revised up significantly for both years. The preliminary estimates for Arizona called for growth of 4.2% in 2022 and 2.1% in 2023. That has been revised up to 4.8% in 2022 and 2.6% in 2023. Exhibit 2 shows total nonfarm payroll job growth in 2023 before and after the Arizona benchmark revisions for the state, the Phoenix MSA, the Tucson MSA, and the Prescott MSA.
Exhibit 2: Arizona and U.S. Job Growth Rates, 2022-2023, Percent
Exhibit 3 gives a sense of how the revisions impact our view of how the state has fared since the pandemic. It shows net job change from February 2020 to December 2023 (seasonally adjusted) for the preliminary and revised data. From this perspective, state job gains were revised up significantly in trade, transportation, and utilities; private education and health services; construction; leisure and hospitality; other services; information; and natural resources and mining. Job gains were revised down in professional and business services; financial activities; and government. Job gains were little changed in manufacturing.
Exhibit 3: Arizona Jobs by Industry, Change from February 2020 to December 2023, Seasonally Adjusted, Thousands
The state unemployment rate in 2023 was changed by the revision (at 3.9%). That was slightly above the U.S. at 3.8% and the state rate in 2022 at 3.8%.
