Arizona's jobless rate dropped a tenth 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 unemployment.

But 6,200 of those new jobs were in construction, noted Aruna Murthy, director of economic analysis for the Arizona Department of Administration. And 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, 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 really is a construction boom until she sees a trend.

"It might be happening," she said. "But this is just one point. And I would like to see a few more months of sustained increases to actually tell that construction is really on a true, increasing upward trend in Arizona."

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

The number of Arizonans 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.

"Things that they can do without, they're still doing without," she said.

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.

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.

The number of people working at bars and restaurants also slid as summer approached.

Health-care employment also took a dip last month. But Murthy said that's no surprise and happens seasonally, as people fall sick less this time of year than they do in winter.

"Even hospitals tend to manage their hiring based on that," she said.

Unemployment rates

(Not seasonally adjusted unless otherwise stated)


(seas adj)

7.8% 7.9% 8.4%

May 2013 April 2013 May 2012


(seas adj)

7.6% 7.5% 8.2%

May 2013 April 2013 May 2012

Area May 2013 April 2013 May 2012

Cochise County 7.8% 8.3% 8.1%

Maricopa 6.1% 6.5% 7.0%

Pima 6.3% 6.7% 7.1%

Pinal 7.7% 8.4% 8.6%

Santa Cruz 15.5% 16.6% 15.4%

Source: Arizona Administration Department


Sector employment in 1,000s

Sector May 2013 At its peak*

Total nonfarm 2,515.0 2,713.6

Manufacturing 155.8 187.4

Natural resources & mining 12.9 14.3

Construction 126.6 247.5

Trade, transportation, utilities 481.1 549.2

Information 9.6 55.6

Financial activities 182.8 187.2

Professional & business services 360.3 408.7

Private education & health services 372.6 323.2**

Leisure & hospitality 281.0 279.1

Other services 85.8 102.0

Government (including public education) 416.5 449.0

* Different sectors have different peak dates

** Prior peak in October 2008 before recession

Source: Arizona Administration Department