PHOENIX - The state's jobless rate inched down last month amid weaker-than-expected showings in retail and health- care employment.
New figures for February put the unemployment rate at 7.9 percent, a decline of one-tenth of a percentage point.
And, on paper, the state did add 22,900 jobs from January. But that's below what is normally expected this time of year, said economist Aruna Murthy of the state Department of Administration.
"people are still worried"
The state's retail sector shed 5,000 jobs month over month as stores were selling less and hiring fewer staffers as a result. "It's a reflection of the economy," Murthy said. "People are still worried. People are not spending as much as they typically do."
Some of the uncertainty is due to the federal government's inability to reach a deal over mandatory budget cuts, she said. At the same time, there was a 2 percentage point increase in payroll taxes, meaning smaller paychecks.
But Murthy said the problem could be more long-term as shopping habits change. She said the experience of the past Christmas season showed a jump in people buying items online. "As a result, they didn't go to a retail store," she said. In turn, traditional brick-and-mortar shops are curtailing their hiring.
Backing up that shift in the economy is the fact that wholesale trade employment in Arizona added 1,500 jobs last month.
Overall employment is approaching 102,000, a 6.2 percent increase over the same time a year earlier.
Murthy said that's a reflection of an increase in the number of firms that have set up warehouses and distribution centers in Arizona. Many of them are shipping directly to customers.
That trend is likely to continue, she said, as younger shoppers who are becoming a larger sector of the spending population are quite comfortable buying things online.
The other area of some concern is the slowing growth in health-care employment.
That is the one sector of the Arizona economy that weathered the recession quite nicely. In fact, employment continued to grow even as other industries were shedding workers.
Last month, however, it lost 1,000 jobs. And year-over-year growth has slowed to just 1.8 percent, as low as it's been since the recession began.
"It's very perplexing to me," Murthy said.
She said one possible explanation is uncertainty over exactly what the federal Affordable Care Act will mean - and even if it really will be implemented. Only when the terms of the program become better understood will companies decide how many doctors and nurses they will need.
At the same time, Murthy said the state's population growth, which stalled during the recession, has not picked up. Fewer people to serve, she said, means fewer health professionals needed.
Bars, eateries strong
One strong sector of Arizona's economy remains bars and restaurants, which added 3,600 staffers last month and 7,700 over the same time a year earlier. Murthy said this is tied to the timing of spring training and other events, as is an increase in employment in entertainment and recreation.
(Not seasonally adjusted unless otherwise stated)
Area Feb. 2013 Jan. 2013 Feb. 2012
Arizona (seas adj) 7.9% 8.0% 8.4%
U.S. (seas adj) 7.7% 7.9% 8.3%
Cochise County 8.1% 8.8% 8.4%
Maricopa 6.5% 7.1% 7.5%
Pima 6.7% 7.3% 7.6%
Pinal 8.4% 9.1% 9.3%
Santa Cruz 16.7% 17.5% 15.8%
Source: Arizona Department of Administration