Arizona job growth outpaces nation by more than double

Arizona’s jobs grew by 0.72% year over year, more than double the national average of 0.32%, the report showed.

The state’s job growth ranked 15th in America, the report noted, adding that 13 states nationwide lost jobs year over year in June.

June marked the third consecutive month of year-over-year job growth in Arizona. Before the streak, the state previously saw eight consecutive months of year-over-year job loss.

Zach Milne, a senior economist for CSI Arizona, told The Center Square this week that states nationwide are seeing slow job growth numbers.

Arizona’s 0.72% year-over-year is a “pretty decent” number given America’s current job environment, he said.

Doug Walls, the labor market information director for the Arizona Office of Economic Opportunity, told The Center Square that Arizona is “starting to see year-over-year” job growth increase.

Walls this week said the private sector is causing all the job growth, which he described as a positive sign.

Eight of the 12 sectors experienced year-over-year job growth, Walls noted, adding that healthcare and social assistance continued to lead the way in job gains.

Walls said Arizona’s construction industry has seen strong job growth since November.

Milne added that Arizona’s largest industry category - trade, transportation and utilities - has been performing well since March, seeing “very strong [job] growth.”

From May to June, Arizona gained 2,400 jobs, according to the report.

But not all the news is good. Milne told The Center Square that Arizona’s May job numbers got revised.

He noted the state’s manufacturing sector originally saw an increase of 600 jobs in May, but with the revisions, the industry posted a loss of 1,200 jobs. The report said Arizona’s manufacturing sector lost 1,800 manufacturing jobs year-over-year in June.

Despite the revisions, Milne said Arizona added 17,600 jobs year-over-year and experienced 0.54% job growth. The original number had Arizona’s May year-over-year job growth at 21,200 jobs.

The state’s unemployment rate is 4.9%, which means Arizona is tied with Delaware for the nation's fifth-highest jobless rate. The CSI report ranks states with the lowest unemployment rates at the top (No. 1) and the highest at the bottom (No. 51), which leaves Arizona tied for 42nd. The District of Columbia (No. 51) has the highest unemployment rate at 6%, followed by California, Connecticut, Oregon and Washington state all tied for second highest rate at 5.2%. South Dakota, which is ranked No. 1 in the report, has the nation's lowest unemployment rate at 2%.

Milne said Arizona’s unemployment rate has been rising the last few months, but he said the number needed to be contextualized. He pointed to Arizona’s economy between 2017 and 2019, which he described as being one of America’s strongest economies.

Milne said during these years, the state experienced unemployment rates between 4.7% and 5%.

He noted Arizona’s current unemployment level is not “historically high” for the state.

Arizona’s labor force participation rate continued to fall in June, the CSI Arizona report found. The state’s labor force participation rate is at 60.3%, which is the lowest since the COVID-19 pandemic, the report noted.

Milne said it is unclear why Arizona’s labor force participation rate keeps falling. He added that 38 states saw their labor force participation rate fall in June.

Walls said Arizona’s decreasing labor force participation rate is a “conflicting trend” compared to the state’s job growth numbers. He noted Arizona has a low number of unemployment insurance claims as well.