We recently published a post examining Arizona Governor Katie Hobbs’ jobs record. Our post noted that since Hobbs took office, government jobs grew to their highest level ever while key private industries have struggled. Although that record included jobs at every level of government, Hobbs took credit for them and included them in her total number of jobs “created,” so it was important to note the growth. Several days after our post, Arizona’s Office of Economic Opportunity (OEO) released the latest monthly jobs report for May. Given the new numbers—and a new press release from the governor’s office—the issue is worth revisiting. While the governor’s previous jobs claims were perhaps just lacking context, the newest release is nothing short of misleading.
The press release headline reads: “Governor Katie Jobbs Announces Record Low Unemployment, Private Sector Job Gains,” and later claims “Employment numbers were driven by private sector growth.” Just down the block at OEO—a department led by a Hobbs appointee—they characterized their own numbers slightly differently. What did OEO say about private sector jobs?
“The private sector recorded a loss of 4,900 jobs in May, led by losses in Leisure & Hospitality (-4,600 jobs) and Professional & Business Services (-3,000 jobs). Prior to the pandemic (2010-2019), private sector employment averaged a loss of 900 jobs in May.”
If private sector employment grew last month, the governor’s office forgot to tell the people who keep track of the data. To be fair to Hobbs, May is typically a weak month in the state, as rising temperatures and the end of the school year limit negatively affect employment statewide.[1] However, as OEO notes this May was historically bad and private sector job losses were 4.5 times as bad as the 10 years preceding the pandemic. OEO has a helpful slide putting the month in context.
This was the second worst May for private sector job losses in the last 10 years. The worst May was last year, also under Katie Hobbs (This may be what led to Katie Hobbs’ Comms Director making the head scratching claim that “private sector employment boomed in May.” Relative to her first May in office, it was in fact an improvement).
To boost their claims of private sector growth, the governor’s press release also touted the overall job numbers since Hobbs took office, noting that 84 percent of the jobs created were in the private sector. While this seems great on its face, there’s only one problem. When Katie Hobbs took office, around 87 percent of jobs in Arizona were in the private sector, meaning 84 percent of new jobs being in the private sector is actually below where the state was prior to her term. Three percent may not seem like a lot, but the difference amounts to well over 3,000 new private sector jobs.
One bright spot in the May job numbers was manufacturing growth, which, as we noted in our previous post, had decreased for six straight months. It’s too early to tell whether this is a one-month blip or the start of a trend, but it will take more growth to make up for all the manufacturing jobs lost since Hobbs took office.
The governor’s office celebrated Arizona receiving its fourth consecutive gold shovel award for economic development, but given the rest of the misleading spin coming from the 9th Floor, four rusty shovels seem more appropriate.
[1] For this reason, economists typically adjust employment and other economic data to smooth out data due to seasonal changes that affect the numbers every year. Importantly, Hobbs’ team touted numbers that were not seasonally adjusted, so that is our focus here. For reference, Common Sense Institute Arizona reviewed May’s seasonally adjusted employment numbers and characterized the month’s employment performance as “seasonally slow.”