Ariz. jobless rate dropped last month; gains in construction employment - Ahwatukee Foothills News: Money

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Ariz. jobless rate dropped last month; gains in construction employment

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Posted: Thursday, June 27, 2013 5:14 pm

Arizona’s jobless rate dropped a 10th of a point last month on strong gains in construction employment — gains that may not really be there.

On paper, the state gained 9,800 private sector jobs in May. Even coupled with expected seasonal losses in public education, that was good enough to move the needle down a bit, to 7.8 percent.

But Aruna Murthy, director of economic analysis for the Arizona Department of Administration, noted 6,200 of those new jobs were in construction. And Murthy said something there doesn’t compute.

She said that’s the highest month-over-month increase ever in construction employment since 1990.

It also does not match other data.

For example, she said before the recession there were 7,000 to 8,000 building permits being issued a month. The most recent figure was about 2,400.

So Murthy is withholding judgment about whether there is really a construction boom until she sees a trend.

“It might be happening,’’ she said.

“But this is just one point,’’ Murthy continued. “ And I would like to see a few more months of sustained increases to actually tell that construction is really on true increasing upward trend in Arizona.’’

Elsewhere in the economy, retail trade was a mixed bag.

The number of people working in the sales of vehicles and parts increased by 400, and is 1,900 above the same time a year earlier.

By contrast, employment in general merchandise, including department stores, slid by 800 between April and May. And this isn’t just seasonal, as total jobs in this sector are below the same time a year earlier.

Murthy said this is likely a sign that the economy remains weak — and that consumers, with limited disposable income, are still being careful with their spending.

“They’re trying to decide how do you allocate among the various things,’’ she said. “Things that they can do without they’re still doing without.’’

Murthy said that the jump in employment in vehicle sales, which matches actual sales figures from the Department of Revenue, may be a function of need versus want.

“If a car is broken down and they need to go to work, they need a car,’’ she said. “So maybe they go buy a car,’’ Murthy continued.

Food also is a necessity.

But other things sold by department stores, ranging from clothing to toys to electronics, may be a lower priority.

There also may be another factor at work: the Internet. Murthy said more purchases made online mean fewer purchases made in local retail stores — and fewer sales clerks and cashiers.

Health care employment also took a dip last month. But Murthy said that’s no surprise.

“The summer was a month where people fall sick less,’’ she said. “Even hospitals tend to manage their hiring based on that.’’

And the number of people working at bars and restaurants also slid as summer approaches.

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