Arizona's unemployment rate more than doubles following coronavirus closures, but is below national average
Ryan Randazzo
Arizona's jobless rate shot to 12.6% last month, reflecting the heavy toll the coronavirus pandemic has inflicted on the previously surging state economy.
The state shed more than 283,000 jobs and hit the highest jobless rate on record since 1975, when the rate hovered around 13% for four months, according to Doug Walls, the labor market analyst for the state Office of Economic Opportunity that tracks employment figures.
Most of the losses were in leisure and hospitality and retail businesses, but every industry in the state, except for mining, contracted last month.
The state's figures are dismal, but better than the national jobless rate of 14.7% in April, a jump from 4.4% in March. It was the biggest month-to-month increase in the national rate in records that date to January 1948. The figures are lower than some economists expected, however, following the abrupt business shutdowns unlike anything seen in modern times.
Some Arizona State University economists are tracking the economic figures in an attempt to get a more current estimate than the month-old data, and their estimate is that the U.S. now has a jobless rate of more than 20%.
Arizona's jobless rate was just 4.5% in February, before the pandemic affected businesses. The number of jobs in the state had increased for 112 consecutive months, but that stopped in March when the jobless rate rose to 6.1% as the first businesses began to close from the pandemic.
But that was just the first inkling of the deeper troubles that the coronavirus would inflict on the state.
Heading into the pandemic, Arizona's labor force was 3.6 million with a state population of about 7.2 million. The labor force is calculated as the number of people older than 16 who are either working or looking for work.
The jobless or unemployment rate is the percent of people in the labor force who are not working.
And the figures likely are continuing to worsen, said Walls, based on the approximately 580,000 people who have filed for jobless benefits in Arizona since the pandemic began. That is a sure sign the figures reported Thursday for the month of April are going to look worse when May figures are reported next month.
"It's one of the staggering numbers for the U.S. and Arizona," Walls said of the jobless claims.
In Nevada, the jobless rate is estimated to have hit 22%. In New Mexico it is about 12%. California's governor recently warned the jobless rate could approach 25%.
Arizona doing better than nation
If there is a silver lining to the figures released Thursday it is that in many regards, Arizona is not taking as big of an economic hit as the national average.
The state has a lower unemployment rate than the U.S. at large, has had smaller percentages of the workforce apply for jobless benefits and has seen less impact on particular sectors like hospitality than the nation, Walls said.
"Really in all three data points we did see that, while the Arizona declines were dramatic ... they still are not as dramatic as the U.S.," Walls said. "That could be due to a multitude of reasons. At this point we do know that some states took much more dramatic action in terms of limiting employment of several industries, particularly construction and manufacturing."
Construction and manufacturing both represent about 7% of the jobs in the state, and both have fared much better in Arizona than the rest of the nation.
Construction in Arizona has continued through the pandemic while some other states have limited that industry to prevent the spread of the virus. And manufacturing in this state has been much less hard hit by the virus.
"As we get more information month after month we will have a better idea of some of the implications of the actions around the U.S. and the state," Walls said.
Where the losses are
Arizona outperformed the national average in 10 out of 11 major sectors tracked by economists, though it still had losses overall.
- The leisure and hospitality sector lost 122,600 jobs in Arizona from March to April. The 36.9% decline in Arizona compared with a 45.8% decline nationally.
- Trade, transportation and utilities lost 57,400 jobs, a 10.4% Arizona decline compared with 10.7% nationally.
- Education and health services lost 37,200 jobs, a 7.8% Arizona decline compared with 10.1% nationally.
- Professional and business services lost 29,800 jobs, a 6.7% decline here compared with 9.1% nationally.
- "Other" services lost 12,900 jobs, a 13.6% decline compared with 21.1% nationally.
- Information lost 5,700 jobs, an 11.7% decline and higher than the national 8.6% decline in this sector.
- Construction lost 4,200 jobs, a 2.4% decline here compared with 10.7% nationally.
- Manufacturing lost 3,900 jobs, a 2.2% decline compared with 10.4% nationally.
- Financial activities lost 2,700 jobs, a 1.2% decline compared with 2.9% nationally.
- Government at all levels lost 100 jobs, a 1.6% decline compared with 4.1% nationally.
- Natural resources and mining actually added 100 jobs in Arizona for the month. That was less than 1% growth but compared with a 7.3% contraction nationally.
Reach reporter Ryan Randazzo at ryan.randazzo@arizonarepublic.com or 602-444-4331. Follow him on Twitter @UtilityReporter.