Aruna Murthy

Arizona economist Aruna Murthy [Ross D. Franklin/AP]

Ross D. Franklin/AP

Arizona lost 800 private sector jobs last month as the state continues to find its financial footing to finally recover from the recession.

New figures from the state Department of Administration put the May jobless rate at 6.8 percent. That's down a tenth of a point from April. That drop could occur even as employers were shedding jobs because, on a seasonally adjusted basis, fewer people were out looking for work.

Aruna Murthy, the agency's director of economic analysis, said that small drop in the rate is hardly a sign of a healthy Arizona economy.

She prefers to look at what employers are telling her staff about their hiring practices, and right now the state is adding private sector jobs at an annual rate of just 2 percent.

In fact, she said only two sectors of the state's economy seem to be performing well: health care and financial services. Pretty much everything else, Murthy said, has been disappointing.

Some of the figures for last month are not surprising. For example, the state's leisure and hospitality industry shed 1,500 jobs between April and May.

“Nobody likes coming to Arizona when the temperature is 110,” she said.

But Murthy noted there were month-over-month job losses in the construction industry. That, she said, was surprising, as May has been a month for job growth in Arizona every year since the end of the recession.

Some of that lag in construction, she suggested, could be a bit of an echo effect of the rest of the economy.

“People are struggling,” she said.

“I've been reading stories recently that young kids are unable to get out of their family homes,” Murthy continued. “They're unable to find a full-time job or they're holding multiple jobs just to pay their bills.”

Murthy said she is particularly concerned about the loss of 3,400 jobs last month in the state's professional and business services, far larger than what has occurred at the same time in the two prior years.

Elsewhere in the economy, retail trade employment dropped by 900 last month as home improvement centers and department stores reduced their workforce.

Murthy said some of that might pick up at the end of the summer with back-to-school sales, but she also cautioned that the state's retail industry may continue to struggle as more people are choosing to make their purchases online.

Murthy also pointed out that loss of 800 private sector jobs is not broadly scattered across the state.

For example, the Phoenix metro area — considered Maricopa and Pinal counties — actually added 600 such jobs in the last month, and Coconino County added 700 in the private sector.

But Yuma County private employment dropped by 600, with a loss of 500 jobs in Pima County, 100 in Mohave County and 75 in Cochise County.

There was a big drop statewide in government employment in May. But that was expected as public schools, colleges and universities furlough some employees for the summer.

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