PHOENIX - The state's jobless rate jumped a tenth of a point in January to 8.0 percent.

That change is due largely to the loss of 45,500 jobs from the month before as businesses shed the extra staff they hired for the Christmas season. Layoffs in retail trade and employment services, mainly temporary-help agencies, amounted to half of the losses in retail trade.

But there is some good news in the numbers, said Aruna Murthy, director of economic analysis for the state Department of Administration. She said the job losses for January are below the 10-year average of 58,600.

There is, however, a big cloud on the horizon: sequestration.

Murthy said Arizona is particularly vulnerable to the budget stalemate in Washington, as federal spending makes up 6.7 percent of the state's gross domestic product. Much of that is linked to the military. And Murthy said she expects the military side of the equation to take deeper cuts than the social programs.

Murthy said she does not expect the jobless numbers for those on the civilian side of military programs to jump. That is because the more likely scenario will be furloughs, meaning they are not going to be considered "unemployed" because they're not out looking for work.

But a furlough means less income, and that will create a ripple effect elsewhere. "Your consumption goes down if a person loses his job," Murthy noted. As these people spend less, that will cause layoffs in other industries.

That effect won't necessarily be equal across the state. Murthy predicted a bigger impact in communities with military bases such as Glendale, Tucson, Sierra Vista and Yuma.

Overall, Murthy puts the potential job loss for Arizona at anywhere from 30,000 to 50,000.

For the moment, though, the employment situation in the state is improving.

The number of people working in Arizona in January was 47,700 more than at the same time a year earlier. At that time the state's jobless rate was 8.8 percent.

Even the retail sector, with its 8,800-job loss between December and January, actually still had overall employment of 3,000 more this year than last year. And there were 7,900 more people working in bars and restaurants this January than the prior January.

One tradeoff, though, has been that employment by private colleges and schools is less now than last year. Murthy said that is to be expected. When the economy goes soft, people go back to school to improve their skills. At the same time, there has been continued scrutiny of private colleges by the federal government, particularly in terms of government guaranteed financial aid.


WASHINGTON - Fewer Americans sought unemployment aid last week, reducing the average number of weekly applications last month to a five-year low. Applications fell by 10,000 to a seasonally adjusted 332,000, the Labor Department said Thursday. That reduced the four-week average to 346,750, the lowest since the week of March 8, 2008, three months after the Great Recession began.

The Associated Press

Unemployment rates

Not seasonally adjusted unless otherwise stated

Area January 2013 December 2012 January 2012

Arizona (seas adj) 8.0% 7.9 8.8%

U.S. (seas adj) 7.9% 7.8% 8.3%

Cochise County 8.7% 7.8% 8.3%

Maricopa 7.1% 6.6% 7.8%

Pima 7.3% 6.9% 7.8%

Pinal 9.1% 8.3% 9.6%

Santa Cruz 17.5% 16.5% 16.6%

Source: Arizona Department of Administration

Unemployment Rates BY SECTOR

Arizona sector employment in 1,000s

Sector January 2013 At its peak*

Total nonfarm 2,472.9 2,713.6

Manufacturing 154.8 187.4

Natural resources & mining 12.4 14.3

Construction 116.7 247.5

Trade, transportation, utilities 483.3 549.2

Information 38.8 55.6

Financial activities 179.9 187.2

Professional & business services 352.0 408.7

Private education & health services 368.7 323.2**

Leisure & hospitality 268.4 279.1

Other services 84.9 102.0

Government (including public education) 413.0 449.0

* Different sectors have different peak dates ** Prior peak in October 2008

Source: Arizona Department of Administration