The seasonally adjusted interest rate stood at 3.4% in June, according to a new report released Thursday by the Office of Economic Opportunity. No lower figure has been registered in the state since the current statistical calculation method was introduced in the 1970s.

The report comes days after the state legislature narrowly rejected Senator Steve Kaiser (Phoenix)’s proposal to drastically shorten the length of time laid-off Arizonas can receive unemployment benefits. .

Mr Kaiser argued that the current system, which provides up to 26 weeks of benefits to those who have been laid off or laid off without cause, robs the unemployed of any incentive to go out and look for new jobs. are doing.

He got the state Senate to approve a graduated scale that would base eligibility periods on statewide unemployment rates. At current levels, the benefits would have ended in 12 weeks under his proposed bill.

But two Republicans in the House, along with Democrats who opposed the bill, rejected the 31 votes needed to approve Kaiser.

One of them, Rep. David Cook of The Grove, said a major flaw in the Kaiser plan was that the duration of the benefits would be based on the statewide unemployment rate. This unemployment rate has a lot to do with unemployment because it’s where most Arizonas live and work. Economic conditions in the Phoenix metropolitan area.

“If I lost my job in Chandler, I could drive to Queen Creek. If I lost my job in Mesa, I might go to Tempe,” Cook said. Tempe, maybe I can go to Phoenix. Or Phoenix can go to Mesa. ”

But rural residents don’t get that kind of flexibility, he says.

Even now, with unemployment rates generally low both statewide and nationally, the situation is different across Arizona.

In Maricopa County, for example, the unemployment rate has been below 3% in four of the last five months.

In Pima County, the proportion of people listed as unemployed, meaning those actively looking for work, has risen by about half a percentage point.

And in Gila County, where Cook lives, the latest unemployment rate was 4.1%.

it is still low. However, it has also been historically proven to be highly unstable.

Even ignoring what has happened as a result of COVID-19, Gila County’s unemployment rate reached 14.1% in January 2010. Ten years ago it was 9.3%.

Much of this is because the employment situation in his county, as well as in several other Arizona counties, is closely tied to copper, both mining and smelting.

“And when mining cuts jobs, it takes a long time to recover,” Cook said.

He said Kaiser’s bill simply doesn’t take into account that there are no jobs nearby that people can take while waiting to be put back to more permanent jobs.

More troubling is what happens when laid-off workers face their benefits being cut and decide to pack up and move elsewhere, Cook said.

“When mining companies lose experienced workers, they spend thousands of dollars training new people with no mining experience,” he said.

Another problem is that unemployment benefits are not paid out of state taxes. Rather, they are a form of insurance, Cook said.

Payments are made from a special fund funded by employer-paid levies on the first $8,000 of each worker’s salary.

The tax rate for this fund is based on how often a company’s employees are ultimately found to be eligible for benefits. This rate ranges from as low as 0.07% for companies with low utilization to as high as 18.78% for companies with many employees laid off or terminated without cause.

Thursday’s new statewide report shows that employment conditions are generally good, especially for workers.

Arizona’s “Vacancy Rate” is 5.9%, which reflects the number of unfilled positions.

Doug Walls, director of state labor market intelligence, said the figure was higher than pre-pandemic levels.

In contrast, the employment rate, or the rate at which employers were able to fill jobs, was only 4.4%.

“This is a sign that employers are still short-staffed and looking for workers,” Walls said.

The side effect is that Arizona companies will have to pay more to fill the slots.

Over the past year, wages in the state rose 5.6%, compared with 3.6% in the rest of the country. Still, the average hourly wage in Arizona is $31.61, compared to $33.37 nationally.

Not all areas of the Arizona economy are growing.

One of the big losses these days is warehousing and transportation.

“This was an industry that benefited from the impact of the pandemic,” Walls said. “Consumers turned to purchasing goods, much of it online. I was doing it,” he explained.

This has benefited businesses that can store and deliver ordered goods.

He said the industry still employs more workers than it did pre-coronavirus, but these companies don’t need that many workers.

Various factors are affecting other economic sectors that cut jobs last month. At least part of it has to do with inflation and the Federal Reserve’s efforts to keep inflation in check with a series of rate hikes.

For example, Arizona’s financial activities sector cut 3,800 jobs from April to May. Half of those were from credit unions, mortgages and other loan brokers and commercial banks, as rising borrowing costs reduced eligible applicants.

The closely related construction sector lost 1,300 jobs in the past month. By contrast, around 1,000 jobs are usually added between April and May.

This is related to housing demand, which is affected by mortgage costs.

Walls noted that from 2010 to mid-2022, the number of permits for new homes grew steadily and fairly consistently, before plummeting by nearly two-thirds earlier this year. Walls said that although there has been some recovery, permits are still down 17% from the same period last year.

Still, there are some signs of optimism, he said. He said one of the biggest factors was the Fed’s decision on Wednesday to halt further rate hikes, at least for now.

This “should be a positive indicator for anyone considering buying a home,” he said.