When you compare employment numbers in February 2011 to February 2010, Arizona added 20,000 jobs in certain sectors that posted job growth. During the same period, however, the state lost 15,000 jobs in certain sectors that lost jobs, including construction, financial services, and local government. The net gain was only about 5,000. Economist Lee McPheters pulls the numbers apart, using data from Job Growth USA, a W. P. Carey School of Business web tool that provides the latest job data from the 50 states and 350 metropolitan areas, including a breakdown of 37 industry sectors. To see the data, including history back to 1991, see wpcarey.asu.edu/bluechip/jobgrowth. The Economic Minute is a regular feature of the Economic Club of Phoenix luncheons."/> The economic minute: Inside the job growth numbers

The economic minute: Inside the job growth numbers

April 18, 2011

When you compare employment numbers in February 2011 to February 2010, Arizona added 20,000 jobs in certain sectors that posted job growth. During the same period, however, the state lost 15,000 jobs in certain sectors that lost jobs, including construction, financial services, and local government. The net gain was only about 5,000. Economist Lee McPheters pulls the numbers apart, using data from Job Growth USA, a W. P. Carey School of Business web tool that provides the latest job data from the 50 states and 350 metropolitan areas, including a breakdown of 37 industry sectors. To see the data, including history back to 1991, see wpcarey.asu.edu/bluechip/jobgrowth. Follow Lee McPheters' slides. The Economic Minute is a regular feature of the Economic Club of Phoenix luncheons.

Lee McPheters: In a nutshell, what I'm going to talk about is jobs, and I'm going to emphasize Arizona jobs. What I want to do is introduce you to a tool that we have available through the Knowledge@W. P. Carey website. We call it Job Growth USA, and you can find a lot of job information in there not only about Arizona, but about the entire nation; all states, all metro areas. What I want to do is just show you how I use that to find out where the growth is in Arizona, where the growth is in the Phoenix -- and then where the growth is not. In a nutshell, let me show you where we are with the Arizona economy right now.

The way we like to look at the economy is to take the current month and look back 12 months -- so the latest numbers we have available are February. Doing that, we see that the Arizona economy added 5,300 jobs. That ranks Arizona number 45 out of 45 in the country in terms of job growth. We have some strong sectors though. Healthcare added over 10,000 in the past 12 months. Transportation and warehousing, that's really important because that shows that Arizona as a distribution center is beginning to pick up. Management of enterprises were 6th in the country in terms of job creation there. That has to do with franchising. It's a rather small employment category, but it's always an area where Arizona's got some importance, I think. Wholesale trade, we rank 18th and in lodging and food services, we rank 35th. That in a nutshell is where the growth is right now in the Arizona economy.

If you look at what's on that list, there are 10,000 jobs in healthcare, 5,000 in transportation and warehousing another 3-4,000 in other areas. You add that all up, you get 20,000 jobs. Now this is a state that ought to be producing about 50,000 jobs in this year-over-year comparison. But we're at about 20,000, however when you take into account the fact that other sectors are losing jobs, you get down to 5,000. Just in terms of your factors and so forth, we're adding 5,000 jobs on a year-over-year basis. This is an economy that can easily add 50,000. When the economy is really booming, we add 100,000 by that measure. So you can see that we're just barely crawling along with economic growth.

Now compare that with the key sectors, healthcare and transportation in particular, for Phoenix. Comparing Phoenix to 26 large metropolitan areas -- think of the biggest metropolitan areas in the country, there's about 25 of them. They have over 1 million people in the labor force. Phoenix is number one in the rate of growth of healthcare over the past year. Number one, in the rate of growth of private education -- that would be University of Phoenix and similar kinds of operations. Number two in transportation and warehousing, number two in real estate. Notice that we only added 700 real estate jobs, but it shows you how this industry is across the whole country. Seven hundred jobs gets you into position number two. Wholesale trade, we're number three. Management of enterprises, number five, so there is growth. There is growth in Arizona. There's growth in Phoenix and compared to other metropolitan areas in particular, some of these important service industries in particular are doing quite well.

Here's the problem. All right, we said 5,000 jobs were added in Arizona. We added up all the sectors that are growing jobs and you got the 20,000, so what's the problem? Well the problem is that we're losing about 15,000 jobs in all the other sectors. In construction, looking back compared to where we are now compared to a year ago, we lost almost 5,000 jobs over that period. So we're still losing jobs in construction here, five years into this downturn. Finance, we lost 1,600 jobs. Manufacturing is basically flat. Local government lost close to 6,000 jobs. Professional and technical, an area where Arizona and Phoenix really ought to be growing; losing jobs. Retail we're 46th.

When you factor it all out, we added 20,000 jobs, but other sectors lost 15,000. We're up only 5,000 jobs compared to a year ago. Again, your frame of reference is that we ought to expect at least 50,000 jobs, and in boom times we add 100,000 jobs. So we're just at a very weak stage. Comparing all the states in a visual sort of way on a map here, all the states in green are adding jobs. There you have five states that are losing jobs. Notice that if Arizona ranks 45th and 45 states are adding jobs that means Arizona is at the very bottom right now of all the states that are adding jobs.

In the West, three of the western states are in the top 10; that would Oregon, Washington and Texas. We have four of the states that are in bottom 10. Our neighbors New Mexico and Nevada are actually losing jobs. Interestingly, California seems to be coming back. They're ranked 15th in terms of overall job creation right now. So the West is not in the position that we typically expect it to be the strongest part of the whole country; but we do have some job growth, Texas and in the northwest.