The state's seasonally adjusted jobless rate dropped two-tenths of a point last month, to 7.6 percent, the lowest it's been since November of 2008. But that's not necessarily because the economy is showing significant signs of improvement.
A new report today from the state Department of Administration found that nearly 35,000 Arizonans simply dropped out of the workforce in the past year. And while some of these folks retired or became disabled, Aruna Murthy, the agency's director of economic analysis, said the majority either left the state or, more likely, simply became discouraged and stopped looking for work.
And Murthy said it could take years to reverse the trend.
“There are jobs,” she said.
In fact, Arizona employers boosted their rolls by 6,900 last month, but that still amounts to just a 2 percent year-over-year growth, a rate Murthy called “anemic.”
“Two percent growth in employment can only take in so many people,” she said.
Still, Murthy said there are bright signs in the report.
Of note was that retailers added 3,800 jobs in December, and while that's not a surprise given Christmas shopping, the figure is 8,200 higher than the same time last year.
She called that “a good sign” that people were loosening up on their wallets for holiday shopping “which we haven't seen for the past few years.”
Still, that leaves the fact that the number of people looking for work in Arizona is about 140,000 less now than it was exactly five years ago.
Murthy said some of that could be attributed to more people deciding to retire.
Some of that, she suggested, could be because they finally can afford to do that. That's because the stock market has been playing with record numbers, meaning the value of 401(k) retirement accounts has recovered.
She also said perhaps 6 percent of those who were working are now disabled. But that still leaves unexplained the other 77 percent of the disappearing workforce.
Murthy said she has no way of knowing how much of this is due to workers leaving the state, whether because of Arizona's loss of more than 300,000 jobs from pre-recession levels or simply approval of legislation aimed at driving those not in this country legally from Arizona's borders.
But she said that, despite all that, the state's population continues to grow, with the latest estimates in the range of 1.6 percent per year. Some of that, though, could simply be births or, at the other extreme, retirees moving here from colder climes, versus people of working age.
That leaves the broad category of discouraged workers.
Aside from growth in retail employment, there were other sectors of the economy that showed growth last month.
Murthy said that financial activities — everything from real estate agents, securities dealers and those working for insurance companies — added 2,200 jobs between November and December. She said that's the largest month-over-month growth since 1997.
The health care industry added another 400 jobs.
On the other side of the equation, employment at hotels and motels dropped by about 400.
Murthy said that could be fallout from the October federal budget stalemate that shut down national parks. She said people planning ahead for December vacations, unsure of what might happen, simply decided to change their plans.
By contrast, bars and restaurants added 800 workers.
“People have to go out and eat,” Murthy said.
That boost actually means employment this sector of the economy, albeit one with generally below-median wages, has finally recovered to pre-recession levels
Construction employment dropped by 900 between November and December.
But Murthy said December is traditionally a slow month for construction, and she said there are signs the industry continues to recover, with year-over-year employment up by 4,900.
The loss of 200 jobs month-over-month in manufacturing — and 2,500 since last year — is a different story. Murthy said many of these losses in this relatively high-paying sector are in the state's aerospace industry which continues to deal with the effects of a smaller federal budget.