Arizona unemployment rate hits 5.9 percent

Arizona’s jobless rate took another jump last month and now hovers close to 6 percent.

And economists at the state Department of Commerce said the situation will continue to deteriorate for the immediate future.

New figures Thursday put the seasonally adjusted unemployment rate at 5.9 percent. That’s up three-tenths of a percent from August; a year earlier the figure was 3.8 percent.

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The last time the state jobless rate was this high was July 2003.

Both the metro Phoenix and Tucson areas posted a 0.2 percentage point month-over-month increase, going to 5.3 percent in Phoenix and 5.6 percent in Tucson.

Not unexpectedly, the construction industry continued to shed jobs. But the rate of decline -- another 4,000 employees -- is sharper than it has been so far. That now puts construction employment in Arizona at 185,700, down 25 percent from the peak in June 2006.

One surprise was the loss of 4,400 jobs in retail. Economist Frank York said stores normally boost employment at this time of the year.

He blamed the losses on a combination of factors, ranging from the credit crunch and commodity prices to falling consumer confidence.

Of some note is the fact that, unlike prior months, the increase in the state jobless rate was not mirrored at the national level. In fact, the federal unemployment rate remained constant at 6.1 percent. Frank Curtis, director of data systems for the Commerce Department, said that new development should come as no surprise.

“Arizona has been hit harder than most of the other states by the housing downturn,’’ he said. “And we’re still seeing the effects of that.’’

There also were fewer people working in September than August in the leisure and hospitality industry, financial services and professional and business services.

Not all of the news was bad.

Frances Griego, another agency economist, said the number of manufacturing jobs dropped by 200 between August and September. But she said the historic trend has been for that industry to lose even more jobs at this time of the year.

And health care actually added 900 jobs month-over month -- and is up by 10,200 from the same period a year earlier.

“We still have a growing and aging population,’’ he said.

Similarly, the growing number of young people in Arizona continues to boost education employment, with 10,300 more people working in that sector last month compared with a year earlier.

Still, Curtis said, that’s not going to rescue the Arizona economy.

“What we expect it to do is mitigate losses,’’ he said.

In forecasts earlier this month, the Department of Commerce predicted the state will lose nearly 34,000 jobs this year and another 13,500 in 2009. At the same time, though, education and health care employment is predicted to continue to increase.