According to the most recent figures released by the Arizona Department of Economic Security, Cochise County's seasonally adjusted unemployment rate increased to 4.7 percent in November, up from 4.4 percent in October. This was the third consecutive month the county's unemployment rate rose, climbing from a record low of 3.8 percent in August. Despite the increase, November's unemployment rate was four-tenths of a percentage point below the rate of 5.1 percent seen in November 2005.

In the first 11 months of 2006, the county's unemployment rate averaged 4.7 percent. This is half a percentage point above the rate of 4.2 percent seen at the state level, and is the same as the national unemployment rate over the same period.

Part of the increase in unemployment over the past few months is likely attributable to the slowdown in the real estate market, which has affected most areas of the county. The general slowdown has led to slower job growth in the construction industry, as well as in other industries that support the construction and sale of homes. These include jobs in finance, insurance, wholesale trade, retail, and other industries.

Higher interest rates have also played a role. In addition to contributing to the slowdown in the real estate market, higher rates also discourage borrowing for consumption spending. This means fewer workers are needed in those industries whose output is typically financed through borrowing.

Higher rates have also raised the cost of previously incurred, variable-rate debt, such as credit cards and adjustable rate mortgages. This means payments on this debt are higher than before, leaving families with less discretionary income. In order to pay for previously incurred debt, families must forgo current consumption spending. Lower levels of spending in the economy means fewer workers are needed.

In addition to county-level data, DES also produces unadjusted estimates of employment data for the incorporated cities and towns of Cochise County. The CER then makes seasonal adjustments to these data. It's important to note the city-level estimates produced by DES are based on a census share model, which presumes the labor force, employment, and unemployment in the county's seven incorporated areas are distributed similarly to what was observed in the most recent census. Using this model, changes in the county's employment situation will produce changes in the city data, but the ratio of city to county data will remain the same as observed in the most recent census, conducted in 2000.

Based on the census share model and CER's seasonal adjustments, Benson's seasonally adjusted unemployment rate in November moved from 7.8 to 8.5 percent. In November 2005, Benson's unemployment rate was 9.1 percent. While these figures are from DES estimates, it's likely that Benson's true unemployment rate is substantially lower than estimated by DES. The opening of Wal-Mart in November and the continued surge in residential construction in the northwest corner of the county likely pose a significant threat to the DES model, resulting in an overestimation of the unemployment rate in Benson.

Bisbee's unemployment rate in November increased from 4.8 to 5.2 percent. A year ago, Bisbee's unemployment rate was 5.6 percent. Douglas' seasonally adjusted unemployment rate in November climbed from 6.8 to 7.3 percent. In November a year ago, Douglas' unemployment rate was 7.9 percent. Similar to the unemployment estimates for Benson, estimates for Douglas are likely higher than the true unemployment rate. Douglas' economy, including its real estate and retail sectors, has continued to perform well, despite a general slowdown in most other areas of the county.

The unemployment rate in Huachuca City moved from 6.4 to 7.0 percent in November. In November 2005, the unemployment rate in Huachuca City was 7.4 percent. In Sierra Vista, the seasonally adjusted unemployment rate in November increased from 2.6 to 2.8 percent. A year prior, Sierra Vista's unemployment rate was 3.1 percent. Of all areas of Cochise County, DES's census share model likely is most accurate for Sierra Vista due to the city's large share of the county's population and economic activity.

The unemployment rate in Tombstone increased from 2.9 to 3.2 percent in November. Tombstone's rate in November 2005 was 3.4 percent. In Willcox, the seasonally adjusted unemployment rate for November increased from 6.7 to 7.3 percent. The November unemployment rate in Willcox a year ago was 7.9 percent. The economy in Willcox has also performed well in recent months, indicating a potential overestimation of the unemployment rate in that city, as well.

At the state level, Arizona's seasonally adjusted unemployment rate increased to 4.1 percent in November, up from 3.9 percent a month prior. In November of last year, the statewide unemployment rate was 4.7 percent.

Nationally, the unemployment rate increased to 4.5 percent in November, up from 4.4 percent a month prior. The national unemployment a year ago was 5.0 percent.

Employment figures, released monthly, are widely regarded as one of the most important economic indicators. However, employment figures are subject to sizable revisions. For the most up-to-date employment data, please visit the CER's website at www.cochise.edu/cer. If you have any questions on the economy, please contact the CER at 515-5486 or email the Center at cer@cochise.edu.