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Arizona's unemployment rate declines to 8.9%

Arizona's unemployment rate declines to 8.9%

From the June's Tucson-area coronavirus coverage: Bars, gyms face shutdowns; Tucsonans worried telemedicine might disappear series
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Hairstylist Carina Acado works with Patte Caraway at Bellazza Beauty Bar, 1951 W. Grant Road. The state’s unemployment rate dropped from 13.4% in April to 8.9% in May, but there are reasons reason to question the reliability of the new figure.

Arizona’s economy appears on the mend, at least by one indication.

New figures Thursday show the state’s seasonally adjusted unemployment rate dropped from 13.4% in April to just 8.9% in May.

But Doug Walls, the research administrator for the Office of Economic Opportunity, acknowledged the real number could be higher.

He said that’s the result of some “misclassification” errors by the federal Bureau of Labor Statistics, the agency that puts together both the state and national numbers.

Specifically, Walls said the BLS listed some people as employed when they were actually on furlough or had been laid off.

So what’s the real number? Walls said the bureau won’t release that until Friday.

But revisions to the April numbers could give some idea.

On paper, the April jobless rate was 13.4%. But Walls said when the Bureau of Labor Statistics made the required adjustments, the more realistic rate was 17.1%.

Still, the state still counts the 13.4% as its official rate for April. And the 8.9% will stand on Arizona records for May, regardless of any adjustments the bureau makes.

That’s not to say the state’s employment situation did not improve — in some cases, significantly. And much of the reason has to do with timing.

The May numbers are based on a household survey done in the second week of the month, asking people whether they are working and, if not, whether they are looking for work. In this case, that was the week starting with May 11 — the first day that Gov. Doug Ducey agreed to allow restaurants and bars to resume dine-in service.

And the results are remarkable: Food service and drinking places added 42,700 jobs over the same time a month earlier.

The other big gainer, Walls said, was in employment in beauty salons and barbers. Here, too, timing is everything, as Ducey agreed to allow them to reopen on May 8.

Still, the Arizona economy is not where it was a year ago.

Even with the monthly gains, employment at bars and restaurants is still 18.2% less than a year ago.

And the hospitality industry — hotels and motels — remains crippled. It shed another 6,500 jobs in May, with year-over-year employment just 52% of what it was in 2019.

Retail trade is starting to pick up as more stores open and more people feel comfortable going shopping, adding 7,400 jobs in May. But that’s still 11,800 fewer than last year.

One industry that appears to have been largely unaffected is construction, which added jobs in May.

Still, Walls cautioned, there may be headwinds.

He said that there were only about 2,800 permits granted in May for new home construction, down abut 29% from a year ago.

There may be another reason to question the reliability of the jobless numbers.

Walls noted that the response rate to the monthly household survey, which was 83% in February, was just 67% in April. The May response rate will be reported on Friday.

On Twitter: @azcapmedia

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