Unemployment: Worse Than We Thought, But Getting Better

Revisions in formulas boost Gila County rate to 11.6 percent, despite strong national trends

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For the past year, folks have lined up at the food banks, the ranks of the homeless rose and community organizations have struggled to cope with the pleas for help.

So lots of people on the front line each month scratched their heads at Arizona’s 9 to 10 percent unemployment rate and wondered why it all seemed so much worse.

Turn out, it was much worse than the state’s unemployment statistics showed.

But now it’s better, honest.

That’s the schizophrenic message of the latest unemployment figures.

On the one hand, federal surveys and recalculations suggested the state has understated the unemployment rate by about 1.4 percent — or 41,000 jobs.

That means the state’s overall unemployment rate has been above 10 percent instead of near 9 percent for the past six months. That kicks Arizona’s rate from better than average to definitely worse than average.

It’s even worse in Gila County, where the corrected rate hit 11.6 percent in January.

Gila County had 20,500 workers and 2,675 people looking for work in January.

Among the people with jobs, 11,000 worked in service-producing industries. That includes 4,775 people with government jobs — nearly one in four workers in the whole county.

Only a few rural Arizona counties have higher unemployment rates than Gila County. That includes Apache County’s 17 percent, Graham County’s 12.6 percent, Navajo County’s 17 percent, Santa Cruz County’s 15.7 percent and hapless Yuma County’s 23 percent.

By contrast, the rate stood at just 9.3 percent in Phoenix, Mesa and Glendale.

All told, it could take Arizona another six years to regain the 300,000 jobs it lost during the recession, concluded the Arizona Department of Commerce.

Nationally, private companies in February added more workers than in any other month in the past year — about 222,000. That offset the 30,000 government layoffs.

As a result, the national unemployment rate dropped to 8.9 percent, the lowest rate since April of 2009 and a full 1 percent drop in the past three months.

Some economists say the February job report indicates the recovery is finally picking up steam. Others worry that rising oil prices and government layoffs may cause the same sort of stall that dashed hopes last spring, when Europe’s debt crisis and the sagging federal stimulus measures spooked businesses and investors.

Still, many economists say the economy will add 200,000 jobs monthly for the rest of the year. However, it takes an additional 125,000 jobs a month just to keep up with population growth and 300,000 jobs a month to reduce unemployment significantly.

Some 13.7 million Americans still can’t find work, double the December 2007 pre-recession tally. Throw in unwilling part-timers and those who have simply given up looking and the rate rises to 15.9 percent — still bad, but the lowest total in two years.

In Arizona, that figure stands at 18 percent and in Gila County it is likely above 20 percent.

Economists also took heart from a reduction of 217,000 in the long-term unemployed, although the number still stands at a daunting 6 million.

The revision in the unemployment figures in Arizona left the state with 2.36 million jobs, the lowest number of jobs since 2004.

The state lost another 45,700 jobs in January — but that’s actually better than normal, since retailers in January lay off a lot of temporary workers they took on for the Christmas season. Normally, employment drops by about 2.4 percent in January. This year, it dropped by 1.9 percent.

State Commerce Department officials aren’t sure why the federal surveys and recalculations resulted in such a big correction in Arizona’s figures, which also affected Nevada and Colorado.

The federal government surveys 50,000 households, including 1,000 in Arizona and also uses a computer model to account for normal, seasonal shifts.

Arizona’s revised rate now stands at 9.6 percent, compared to Nevada’s 14.9 percent and California’s 12.5 percent.

Still, initial claims for unemployment in January stood at 29,123, compared to 31,536 for the same month last year.

The state’s January unemployment rate stood at 9.6 percent, a full 2 percentage points below Gila County’s rate.

Due to the seasonal shifts, the state in January lost 37,700 private sector jobs and 8,000 government jobs. That included 2,500 school jobs and 5,400 local government jobs.

Most sectors lost jobs, with two notable exceptions.

Leisure and hospitality gained 5,300 jobs, a good sign for Rim Country’s tourism-dependent economy. Now, hotels and restaurants are hoping the steep rise in gas prices won’t curtail travel.

Meanwhile, health care gained 11,200 jobs, although huge state cuts in its AHCCCS program could reverse that trend. Gov. Jan Brewer has proposed cutting 250,000 people off the AHCCCS rolls and a bill that passed the Senate Appropriations Committee has proposed eliminating the program entirely. That would save the state $1-$2 billion but leave some 1.4 million Arizonans without healthcare and cost the state $7.5 billion in federal funding for healthcare.

The analysis of the figures compiled by the Arizona Department of Commerce concluded “overall the employment situation in Arizona was fairly typical for January.

“The job losses were less compared to the historical averages. This is reflective of the current business environment where most industries are operating with a lean staff from significant workforce reductions due to the recession. Additionally, lower than average hiring in the fourth quarter and leaner staffing trends for the last couple years together with a gradually improving economy likely contributed to the lower-than-average January job losses.”

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