Arizona Department of Commerce economist Dennis Doby delivers the latest unemployment figures.
Ted Simons: Welcome to "Horizon." I'm Ted Simons. Three new confirmed cases of swine flu in Arizona were reported today. That brings the total to four. The latest Arizona cases are all school-aged children as a result; two elementary schools in the Chandler unified district have been closed for seven days by the Maricopa County health department. Arizona is expected to lose nearly 168,000 jobs over the rest of this year and into next year. That's the latest from the Arizona department of commerce, which says a slight recovery is expected later this year or early next because of lower prices on key consumer items. Credit is expected to thaw, helping the recovery. Here to talk about all that is Arizona Department of Commerce economist Dennis Doby. Good to see you again.
Dennis Doby: Good to see you.
Ted Simons: You've got numbers for us, don't you?
Dennis Doby: Yeah, but they're not real good.
Ted Simons: What have we got?
Dennis Doby: For March the unemployment rate went from 7.4% in February to 7.8% in March of 2009. The job growth was down to 6.9%. That's pretty high; and a loss of 183,100 jobs for March of 2008.
Ted Simons: 183,000 fewer people employed year-to-year. Have we seen anything like this before?
Dennis Doby: In numerical numbers, no. In percentage terms after World War II, the late '45, December '45, percentage terms it reached 8.2%. In numerical terms, this is a record.
Ted Simons: Any surprises from some of the numbers you just talked about?
Dennis Doby: No real surprises; construction, trade, professional business services leading the way in the losses.
Ted Simons: How low is this going to go? I guess we can get to the forecasting aspects. We know it's pretty bad right now. Is there light at the end of the tunnel?
Dennis Doby: I think so. I think we're getting close to the bottom, at least that's what our forecast tends to anticipate. But the fact we're down at 6.9% in April, which may be lower, hopefully the bottom will be reached in the next few months.
Ted Simons: 7.8%. Are we likely to see eight, nine, maybe even 10?
Dennis Doby: We're likely to see 8% and possibly 9% before this peaks. The unemployment rate being a lagging indicator, we'll see it continue to rise through 2009. It's possible to hit double digits like our neighbors in Nevada and California.
Ted Simons: But yet when you talk about job growth, we're ranked pretty much at the bottom, aren't we?
Dennis Doby: As of March we're ranked at the bottom. We're 50th out of the 50 states. Michigan was behind us, but we passed them with our minus 6.9% over the year growth.
Ted Simons: Correct me if I'm wrong, lots of folks who may have gotten severance pay, are they now coming on to the rolls, or have they been there? How does that work?
Dennis Doby: If you're -- with the unemployed, it's a measure of, are you actively looking for work. If they're looking for work, they're on the rolls as being unemployed. If they're a discouraged worker and they're answering we're no longer looking for work, they won't show up in the numbers.
Ted Simons: It sounds like we'll have more state workers, possibly teachers as well joining the rolls.
Dennis Doby: That's what it looks like, yes.
Ted Simons: Compare and contrast if you would this recession with maybe mid '70s, early '80s, where we were hit pretty hard as well.
Dennis Doby: We were. But the growth rates, the over the year losses for what we're projecting for calendar 2009 are going to be higher than what we've seen in '82 or '75. Those lasted -- the recessions officially 16 months. Our peak was in December of 2007, as of April, we're in the 16th month. So this one is going to last longer. And it's also going to be deeper than both of those recessions.
Ted Simons: as far as the forecast, from what you can see what the forecast says, what are we looking forward to? What should we watch out for?
Dennis Doby: Potential shocks in the economy that could hit and cause even further growth. Right now we're looking for the bottom to be reached, and you've seen a number of national reports saying that the end may be -- we may be getting close to that. We certainly hope that that's the case, and we think the bottom will be reached somewhere in 2009, and the rate of loss will slow into 2010. The problem with reaching positive numbers is it's going to be slow growth instead of a rapid increase like we've seen in prior times.
Ted Simons: With that said, is there a leading indicator that would indicate better job numbers ahead?
Dennis Doby: I don't think there's a leading indicator; at least not the one that I'm aware of. There's some stuff that -- to look at like retail sales, the G.D.P. numbers that were recently released showed personal consumption expenditures were up in the first quarter from the fourth quarter of 2008, but the fourth quarter of 2008 was pretty bad numbers. So you've got to take and look at a wide variety of indicators to see some potential hope out there for slowing and foreclosures, maybe some increases in the sales of those. There's positives, but for every positive there seems to be a negative.
Ted Simons: Any sign of something concrete and positive in the near future?
Dennis Doby: One thing I'm looking for to see is a positive for me is, we've had 19 consecutive months of over the month declines in construction employment. If we can get a positive over the month increase in construction employment, I'm going to take that as a positive sign.
Ted Simons: I think we'll all take that as a positive sign. Thank you very much for joining us.
Dennis Doby: You bet. No problem.
Dennis Doby:Economist, Arizona Department of Commerce;