Horizon, Host: Ted Simons

March 26, 2009


Host: Ted Simons

Arizona Unemployment


  • Dennis Doby, an economist for the Arizona Department of Commerce, analyzes the latest Arizona unemployment statistics.
Guests:
  • Dennis Doby - Econmist, Arizona Department of Commerce
Category: Business/Economy

View Transcript
Ted Simons:
Good evening and welcome to "Horizon." I'm Ted Simons. Arizona's unemployment rate was up to 7.4% in February under the national average of 8.1%. There was some good news as well in five of Arizona's employment sectors. They had small gains in February. Here to talk more about the numbers is Arizona Department of Commerce economist Dennis Doby. Good to have you back on the program.

Dennis Doby:
Good to be back. Thanks.

Ted Simons:
Up .4, 7.4%, any surprise there's in.

Dennis Doby:
Not really. Trending upward just like the national rate has been doing for the last few months. We are seeing the rates throughout the state trending up. The Phoenix metro rate went from 6.1 to 6.7%.

Ted Simons:
Lower than the national rate, which was at 8.1%, what do you take out of that?

Dennis Doby:
There's a number of factors that could be involved in that. One is, with the number of jobs we lost over the year, in February, it was 173,000 jobs over the year, people may have moved to other states looking for work for better opportunities. There could be a growing number of discouraged workers, people who have given up their active job search and they are no longer considered part of the labor force. Those factors factor into the official rate which is a measure of just those actively looking for work during the reference period.

Ted Simons:
Can you argue that with the nation at 8.1% and Arizona now at 7.4% that we are doing a little better than the curve?

Dennis Doby:
Difficult to say with that one because of the way the statistics are measured. We are playing catch-up to the national rate. We will probably catch it and may even go a little bit above it at this point. It is a bit of a lagging indicator. If you look at our establishment numbers, the non-farm payroll employment, that's certainly showing we are down towards the bottom of the growth in the country.

Ted Simons:
Again, trying to find a half-full glass here. State did add jobs. Correct?

Dennis Doby:
It did. It added 2100 jobs over the month. If we put this in perspective, last year, from January to February, we added just under 20,000 jobs. Two years ago we added just over 37,000 jobs. When you see the February numbers you typically expect because they are not seasonally adjusted. We typically expect to see things like professional and business services during tax time, some employment there. Leisure and hospitality, some games there because of tourism and government because of related to schools. We have seen some of those gains. Just not what we have seen in the past.

Ted Simons:
As far as those sectors hit hardest, usual suspects here? Construction, retail?

Dennis Doby:
Definitely. Construction, retail, trade, and the professional and business services portion that includes those temporary help agencies.

Ted Simons:
Let's talk about sectors doing well. You just mentioned a couple. What else looks like it's doing reasonably well?

Dennis Doby:
Our star has been educational and health services and that's been due to the health services portion. That one is still showing positive over the year growth. However, that growth has slowed down.

Ted Simons:
OK. Are there surprises in sectors doing well, sectors not doing well? Anything that kind of jumps out at you?

Dennis Doby:
At this point it's playing to form with construction leading the way and then that down turn in the housing industry is trickling through the rest of the economy in the state and it's affecting the amount of money that's out there that can be spent, and you are seeing retail trade numbers flowing down because of that. There's -- people are buying the necessities. They are not going out and buying some of bigger ticket items although some recent data suggested that sales may be up a bit. Maybe just very small bit but a bit.

Ted Simons:
You mentioned people may have stopped looking for work, and some folks may have left the state. Is there a metric involved? Can you find of figure that out a little bit better or is it just pretty much, what, anecdotal? How does that work?

Dennis Doby:
At the national level on a monthly basis they provide what they call alternate measures of labor underutilization and they call them U-1 through U-6 with the national rating about U-3 number. And at the national rate the official rate is 8.1. The broadest measures that include all those people that are marginally attach order discouraged that rate is 14.8%. If you apply that same type of methodology to the Arizona numbers, and say that the current rate is 7.4, and the broadest measure may be double that, you are into the 14 to 15% range.

Ted Simons:
OK. As far as the next few months, what are you seeing? Are we scraping bottom here? I know that -- here's a question for you, jobless rates are usually lagging indicators of the economy. As far as jobless numbers being a lagging indicator of a recovery, is that the same thing?

Dennis Doby:
The unemployment rate will recover after we have seen increases in the establishment data, the non-farm payroll day that. Those numbers we expect hopefully to be at or the bottom and the rate of loss will begin to slow. As we see improvements in the job market, and the number of jobs start to increase, people that were discouraged recall start entering the labor force and they will show up on the unemployed side. So after we have seen the recovery actually start, we may see the unemployment rate still go up for a while before it heads back down.

Ted Simons:
What's your hunch? Are we looking at the bottom here shortly?

Dennis Doby:
That is my prognosis that we are sometime in calendar 2009, we are definitely going to hit bottom and the rate of loss is going to begin to slow and we will be positive but weak positive probably in early calendar 2010.

Ted Simons:
All right. Dennis, thank you so much for joining us.

Dennis Doby:
No problem.

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