PHOENIX - New unemployment numbers released Thursday suggest the state's economic recovery is weakening.
The jobless rate for March stayed at 7.9 percent. But the year-over-year growth in new jobs, which had hit 2.5 percent last June, has been sliding for several months, said economist Aruna Murthy of the state Department of Administration. And now it's just 1.8 percent.
And that is only part of the issue. Murthy said retail trade employment grew at an anemic 0.2 percent - just 500 jobs - since the same time a year earlier.
In fact, if Arizonans were not out buying cars in force last month, forcing dealers and parts-supplies firms to add staffers, there would be fewer retail workers now than a year earlier.
Pulling down the numbers is weak employment in general merchandise retailers, including department stores and warehouse membership clubs. There are 1,500 fewer Arizonans employed at these stores now than a year earlier.
The "why" behind all of this is complicated, Murthy said.
One factor is the increase in payroll taxes. Congress allowed a temporary 2-percentage-point reduction to expire, meaning less in take-home pay.
Then there's the federal budget problems and the "sequestration" of funds. While the cuts really have not yet occurred, just the possibility has made retailers and consumers a bit jumpy.
At the same time, she said, there is a pent-up demand for new wheels. Murthy said that vehicle sales during the recession dropped by numbers not seen since World War II as motorists decided they could not afford such a major financial commitment and had to make do with their old jalopy. Now that the economy has improved - and with many of these vehicles reaching the limit of their usefulness - sales are booming.
That is showing up in figures from the state Revenue Department. It reported sales at motor vehicle dealers in January of $531.6 million, a nearly 11 percent increase from the same time a year earlier.
That resulted in a 4.9 percent boost in the number of people working in that sector of the economy.
But here's the flip side: That rush to buy cars and trucks may be causing a drag on the rest of the retail economy. When people invest in high-ticket items, even if they finance them, that can mean less disposable income for other items.
Vehicle sales aside, Murthy said the other bright spot in the state's employment situation is in the leisure and hospitality industry. That includes workers at restaurants and bars, where the number of people working is 7,900 higher than a year earlier, a 4.1 percent increase.
Much of that is likely due to the "snowbirds" who spend the winter in Arizona, as well as tourism, she said.
Not seasonally adjusted unless otherwise stated
Area March 2013 February 2013 March 2012
Arizona (seas adj) 7.9% 7.9% 8.4%
U.S. (seas adj) 7.6% 7.7% 8.2%
Cochise County 8.3% 8.1% 8.1%
Maricopa 6.6% 6.5% 7.2%
Pima 6.8% 6.7% 7.3%
Pinal 8.4% 8.4% 8.9%
Santa Cruz 16.8% 16.7% 15.6%
Source: Arizona Department of Administration