Jobless rate goes up in Arizona

By Howard Fischer
Capitol Media Services
Published/Last Modified on Saturday, June 21, 2008 3:06 PM MDT


PHOENIX — The state’s jobless rate jumped a half point in May, something that has not happened in 17 years.


 New figures Thursday from the state Department of Commerce put the seasonally adjusted unemployment rate at 4.4 percent. That still trails the national figure of 5.5 percent for May, which also is up a half a percentage point from April.

 But Dennis Doby, the agency’s senior director of research administration, expects the situation here to get worse before it gets better.

 Doby said the monthly unemployment numbers “bounce around a bit given the size of the sample’’ of businesses and individuals surveyed. He said that makes it “difficult’’ to predict the figure for June. “But I would say that the general indication, based on what we’ve seen in the trends, is there will be an upward trend in the unemployment rate to the end of the year,’’ Doby said. “But it still could bounce around in any given month.’’

 For the time being, Doby said he is sticking with his prediction made last month that the economy “should improve by the end of the year and go back to more positive growth in 2009.’’ Doby acknowledged there have been some recent developments since that prediction, including the Arizona Consumer Confidence Index hitting its lowest rate in 16 years. Pollster Earl de Berge said that drop is being driven by fears that business conditions will get worse — as will the employment situation. “I want to remain optimistic at this point,’’ he said.

 As has been the case for months, the higher unemployment figure was driven by new losses in the state’s construction industry. It shed another 2,200 jobs in May, bringing the year-over-year loss to just shy of 29,000.

 The one small bright spot in that is in heavy construction, mainly including road building, which added 200 jobs in May.

 That news comes as business and community groups are pushing voters to enact a one-cent increase in state sales taxes to fund a $42.6 billion program to build new roads and rail systems. That effort so far is being financed almost exclusively by construction companies that could benefit from new government contracts.

 Doby said the fact that heavy construction employment now remains steady does not mean that will be the case in the future. He said the people working now could be finishing long-term contracts.

 And they could be out of work if new road-building projects are not approved. Retail trade lost 1,700 jobs in May. “Consumers have changed their spending habits,’’ Doby said. He said higher gasoline prices have forced Arizonans to cut back on their expenses for everything else. And he said the purchases they are making are at discount stores rather than regular retailers.

 There also was a loss of about 1,000 jobs in the state’s leisure and hospitality industry. But Doby said that is expected at this time of the year as winter visitors disappear.

 He said that part of the economy still remains relatively healthy: Even with the monthly job loss there still are 2,300 more people working in that sector than a year earlier.

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