George W. Hammond, EBRC director and Eller research professor
Arizona has more open jobs per unemployed resident than the U.S.
Arizona added 4,100 seasonally-adjusted jobs over the month in November, similar to the revised job gain of 5,500 in October. The preliminary October data put growth at 5,400 jobs.
Arizona’s seasonally-adjusted unemployment rate ticked up again to 3.7% in November, up from 3.6% in October. Arizona’s rate remained below the national average in November (4.2%).
Over-the-month job gains in November were driven by private education and health services (up 2,400); leisure and hospitality (up 2,200), manufacturing (up 1,700); trade, transportation, and utilities (up 1,200); and government (up 1,000).
The state lost jobs in construction (down 1,900); professional and business services (down 1,400); financial activities (down 800); and other services (down 400).
Jobs were stable over the month in information and natural resources and mining.
Arizona jobs were up 59,800 over the year in November, which translated into 1.8% growth. That outpaced the U.S. at 1.4%. Year to date through November, state jobs were up 2.1%, again outpacing the U.S. at 1.6%.
As Exhibit 1 shows, private education and health services drove state job gains over the year, followed by government; trade, transportation, and utilities; professional and business services; financial activities; leisure and hospitality; other services; and natural resources and mining.
Jobs in construction; information; and manufacturing were down over the year.
Exhibit 1: Arizona Net Job Change (Thous.) and 2023 Annual Wages per Worker
Phoenix MSA jobs were up 42,900 over the year in November, for 1.7% growth. That accounted for 71.7% of state job gains. Similar to the state, gains were largest in private education and health services; trade, transportation, and utilities; government; financial activities; and professional and business services. Year to date through November, Phoenix jobs were up 51,600, or 2.2%.
The Tucson MSA generated 3,000 net new jobs over the year in November. That translated into 0.7% growth. Tucson accounted for 5.0% of state job gains. The largest job gains were in private education and health services; financial activities; leisure and hospitality; and other services. Year to date through November, jobs were up 3,600 (0.9%).
Jobs in the Prescott MSA increased by 900 over the year in November (1.3%). The largest job gains were in government; trade, transportation, and utilities; and private education and health services. Year to date through November, jobs were up 1.5% (1,030 jobs).
Arizona’s labor market remains relatively tight, with low unemployment and plentiful job openings. The latest data from the Job Openings and Labor Turnover Survey suggest that there are more job openings per unemployed resident in Arizona than nationally (Exhibit 2). In October, there were 1.3 open jobs per unemployed resident, while for the U.S. there were 1.1. For both the U.S. and Arizona, this rate has declined significantly from 2022.
Exhibit 2: Arizona and U.S. Job Openings per Unemployed Resident, Seasonally Adjusted
As the labor market has loosened since 2022, labor compensation growth has slowed (Exhibit 3). The employment cost index, published by the U.S. Bureau of Labor Statistics, includes wages and fringe benefits and reflects private-sector workers. In the third quarter of 2024 (latest data), the employment cost index for the Phoenix MSA rose 3.3% over the year, compared to 3.6% nationally. That was down from a peak of 5.5% for both Phoenix and the U.S. in 2022.
Exhibit 3: Phoenix MSA and U.S. Employment Cost Index Growth, Private Sector, Over the Year
