State's unemployment rate remains at 9.4 percent - East Valley Tribune: Business

State's unemployment rate remains at 9.4 percent

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Posted: Thursday, January 20, 2011 10:58 am | Updated: 10:34 am, Fri Jan 21, 2011.

Arizona’s seasonally adjusted unemployment rate remained at 9.4 percent in December as the state added only 3,400 jobs.

The lack of change comes as the federal jobless rate dropped four-tenths of a point over the same period, to 9.4 percent.

But Aruna Murthy, director of economic analysis for the Arizona Department of Commerce, said that doesn’t mean the economy is doing better elsewhere than here. Instead, she said, it’s a statistical aberration.

Specifically, Murthy said the federal rate declined not so much because of jobs added but because there are fewer people looking for work. That includes those who have decided, given the state of the economy, to go back to school or simply quit looking. And when people stop looking they are no longer considered “unemployed.’’

The Department of Commerce no longer produces figures for the seasonally adjusted unemployment numbers for individual counties.

As has been the pattern for the last few months, the economy is being driven largely by consumer confidence — or the lack thereof.

Murthy noted that retailers hired 4,000 people in December, a figure that reflects what store owners need for their workforce. But she pointed out that, prior to this year, the average retail hiring in December is about 6,100.

There does, however, appear to be some sign that people are finally willing to spend on entertaining themselves.

Total employment in the leisure and hospitality sector was up by 2,800 in December. That compares with losses of 2,400 and 1,500, respectively, in 2008 and 2009.

That growth comes primarily from hiring at bars and restaurants.

Murthy noted, though, the picture has been somewhat bleaker in the hotel industry. It picked up just 400 workers in December. And total employment actually is 400 less than a year earlier.

“It’s purely a function of recession,’’ Murthy said. “People have traveled less to Arizona compared to what they have been observing historically.’’

She said there may be a variety of reasons for that.

“People could have traveled less because they haven’t sold their house and didn’t want to move to Arizona,’’ Murthy explained. “It could have been because they don’t have a job and they didn’t want to travel on a vacation.’’

The state’s construction industry, which had begun to show signs of recovery earlier this year, fell back in December, shedding 4,200 jobs. That leaves this sector of the economy at just 46 percent of what it was at its peak in June 2006.

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