Arizona unemployment rises despite faster job growth

Arizona’s job market is growing, but not fast enough to keep unemployment from rising to its highest level since the COVID era.

Zach Milne, senior economist and research analyst for the Common Sense Institute Arizona, sees both strength and caution in the latest labor report.

“It’s been a little bit of whiplash with the jobs numbers the last couple of months,” Milne told KTAR News 92.3 FM on Monday.

Arizona’s unemployment rate rose to 4.9%, continuing a monthslong increase. Milne said the rise is worth watching, but the current level is not far from what Arizona saw before the pandemic.

“Arizona labor market was growing very fast, and unemployment averaged about 4.7 to 5% during that time,” Milne said of the years before COVID lockdowns. “We are kind of working our way back up to what might be more of a normal range.”

Milne said construction and trade are seeing some of the strongest job growth as the Valley continues to expand. Healthcare also continued to grow in Arizona, mirroring a national trend.

While manufacturing sector dipped, it may not tell the whole story

One surprise came in the manufacturing sector.

Earlier estimates that showed manufacturing growth in Arizona were recently revised downward, turning a reported job gain into a job loss.

The decline comes despite major semiconductor investments in the state.

“There is a lot of investment here in Arizona, and particularly in the Phoenix Valley,” Milne said. “It might just take some time for that investment to result in jobs.”

Overall, Milne said he remains optimistic about the state’s economy because businesses and workers continue to move to Arizona.

“All of those things point to me that there’s still this promise of economic prosperity here in Arizona,” he said.

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