As COVID-19 pummels away in Arizona, unemployment in the state dipped slightly in December, with the restaurant and entertainment industries continuing to take the hardest hits.
The state unemployment rate was 7.5% last month, compared with 8% in November, putting Arizona among 20 states with the good fortune to post December decreases, according to the U.S. Bureau of Labor Statistics.
And it’s an improvement from the initial onslaught of the pandemic, when the jobless rate rose to as high as 10% last spring before dropping to 5.9% in July and August. Since then, the numbers have been on a bit of a roller coaster, with the December jobless rate showing higher than the national average of 6.7%.
Dining and entertainment have been hit the hardest and will continue to be under constant duress throughout this year to stay afloat, said Lee McPheters, a research professor at the W.P. Carey School of Business at Arizona State University.
“Your big problems are restaurants, hotels and motels,” McPheters said by phone.
One reason: These are jobs where employees can’t work from home. Dennis Hoffman, the director of the L.W. Seidman Research Institute at W.P. Carey, said in-person jobs are at higher risk than jobs that can be worked remotely.
“Job losses have occurred in those areas that depend upon face-to-face contact, whether that be amusements, hospitality, restaurants and bars,” Hoffman said by email.
Such employees also are more vulnerable to job loss than other workers.
“Those, unfortunately, are jobs that are kind of lower paying jobs – lower income people are getting hurt by the service sector being so weak as a result,” McPheters said.
The federal government deserves some of the blame, according to economist Dave Wells, research director at the Grand Canyon Institute. Some Americans didn’t get promised stimulus checks that could have spurred spending, he said by phone.
Economists have expressed optimism that Arizona eventually will get back on its feet. Much of this lays on the success of a COVID-19 vaccine and getting as many people immunized as possible.
Doug Walls, economic research administrator at the Arizona Office of Economic Opportunity, remains hopeful the economy will bounce back to prepandemic conditions.
“We’re seeing continued improvement month-over-month,” Walls said.