State jobless rate declines

Job seekers have more reason to feel optimistic as the state and Valley's unemployment rates dropped last month, the Arizona Department of Economic Security reported.

However, the latest employer survey by Manpower forecasts a downturn in hiring during the next three months in the Valley. The state's jobless rate inched down to 5.9 percent in May from 6 percent in April, while the Valley's rate fell to 5.3 percent from 5.5 percent.

Nationally, unemployment increased from 6 percent in April to 6.1 percent last month.

“For the month of May it certainly could have been worse,” said Don Wehbey, the DES's senior economist. “The earlier two months of May we had losses. Even last year there was a loss of a little more than 3,000 jobs over the month. So a paltry gain of 300 jobs looks pretty good when you compare that.”

Nonfarm jobs posted a less-than-average increase of 300 jobs, while seasonal losses occurred in government, especially public education, along with leisure and hospitality. Manufacturing, information services, and professional and business services had cyclical reductions.

Arizona's recovery continued with 11 consecutive months of annual job gains, according to the department. Since May 2002, the state's economy has added 16,000 jobs.

“We won't be on to a full recovery, a complete recovery, until actually manufacturing turns around,” Wehbey said.

Manufacturing shed 1,200 jobs. With an over-the-year reduction of 10,500 jobs, manufacturing has returned to 1990 average employment levels.

Many of the losses in manufacturing and information services were related to the high-tech industry, Wehbey said. Information services reported a loss of 500 jobs.

“One produces a product and one services it,” he said. “There's a strong relationship there.”

Construction showed the largest gain among industries with an increase of almost 2,000 jobs. Educational and health services reported adding 700 jobs.

Improving consumer confidence led to an increase in trade employment as retail had an above-average gain of 700 jobs.

Transportation, warehousing and utilities showed an increase of 200 jobs, mostly from truck transportation. Financial activities had a weaker-than-average gain of 100 jobs, while real estate, rental and leasing gained 100 jobs.

Real estate has grown as many people who would have gone into high tech have switched careers, Wehbey said.

“A lot of people have gone to get their real estate license,” he said.

An increase of 600 jobs in hotels and other accommodations led to a below-average loss in overall leisure and hospitality employment.

“Relative to everything, we're doing OK,” Wehbey said. “We're still probably, as we were 10 years ago, a job-growing state. Yes we've lost, but in more cases than not, there has been a recovery.”

Employment opportunities through September appear best in transportation/public utilities and education, according to the latest Manpower Employment Economic Outlook Survey. Job reductions are expected in construction, services and public administration, while durable goods manufacturers and wholesale/retail trade employees voice mixed hiring plans.

From July through September, 17 percent of companies surveyed plan to hire more employees, while 21 percent intend to reduce their work force. Another 59 percent expect to maintain their current staff levels and 3 percent are not sure of their hiring plans.

“Last quarter the job outlook held more promise when 29 percent of companies surveyed forecast adding workers and 4 percent anticipated reductions,” said Manpower spokesman Joseph Tuerff. “Employers were also more upbeat a year ago at this time as 43 percent thought hiring increases were likely and 14 percent intended to cut back.”

Higher unemployment rates are expected for June and July, Wehbey said.