Picture this: A local economy that's been humming along suddenly hits a speed bump, with fewer people jumping into the workforce and jobs becoming a bit harder to snag. That's the eye-opening reality unfolding in Prescott right now, and it's sparking plenty of chatter about what it means for everyday folks. But here's where it gets controversial – is this just a temporary dip, or a sign of deeper shifts in how we work and live in Arizona? Stick around as we break it down, step by step, with insights from trusted experts.
The labor market in Prescott is showing signs of cooling off, largely due to a shrinking workforce, based on a detailed analysis from the Economic and Business Research Center (https://www.azeconomy.org/), Arizona's go-to resource for economic insights since 1949. This center has been providing reliable data on the state's economy for decades, helping everyone from policymakers to everyday residents understand trends.
In August, the seasonally adjusted civilian labor force in the Prescott Metropolitan Statistical Area (MSA) was reported at 106,966, which is basically unchanged from the previous month. To clarify for beginners, 'seasonally adjusted' means the numbers are tweaked to account for typical ups and downs, like holiday hiring spikes, so we can see the real underlying trends. The labor force had dipped from 107,062 in April to 106,855 in May, but it's been slowly bouncing back since. Even with these recent gains, though, the overall civilian labor force for the year so far is 3.0% smaller than it was during the same period last year. This shrinkage could mean fewer people are actively seeking jobs, perhaps due to retirements, education pursuits, or other life changes.
And this is the part most people miss: While the labor force is recovering slightly, employment figures tell a different story. Seasonally adjusted resident employment in the Prescott MSA ticked down to 102,648 in August, a drop of 49 from July. Employment has been on a downward trend throughout 2024, sliding from 106,673 in December 2023 to around 103,000 in recent months. Year to date, resident employment for the first eight months is 3.6% lower than in the same timeframe last year. For context, this might reflect a slowdown in local industries or broader economic factors influencing job availability.
Seasonally adjusted unemployment in the Prescott MSA climbed by 55, which is a 1.2% increase, reaching 4,318 in August. Almost every month this year has seen these unemployment numbers rise, starting from 3,851 in January and hitting a year-to-date peak now. Compared to the same period last year, resident unemployment is up by 13.6%. At the state level, Arizona is facing similar challenges, with unemployment rising from 146,714 in January to 157,143 in August – that's a 7.1% increase overall.
The seasonally adjusted unemployment rate for the Prescott MSA stayed steady at 4.0% in August. It has been creeping up gradually in 2024, from 3.6% in January to its current level. Arizona's statewide unemployment rate mirrors this pattern, beginning at 3.9% in January and February, then climbing to 4.1% from March through August. These rates are important because they show the percentage of the workforce without jobs, and a steady rise can signal economic uncertainty.
But here's where it gets controversial: With unemployment ticking up, some argue it's a natural response to a changing economy, while others worry it could lead to broader inequality or missed opportunities. What do you think – is this trend something to worry about, or just a blip on the radar? For more on how big developments are reshaping Arizona's economy, check out this ECONOMIC NEWS piece: How TSMC Arizona changes the state’s economic landscape (https://azbigmedia.com/business/economy/how-tsmc-arizona-changes-the-states-economic-landscape/). And if you're curious about workforce building, tune into the LEARN MORE section with the AZ Big Podcast: Rose Castanares of TSMC talks building a massive workforce (https://azbigmedia.com/business/az-big-podcast-rose-castanares-of-tsmc-talks-building-a-massive-workforce/).
On a brighter note, non-seasonally adjusted hourly earnings in the Prescott MSA saw solid gains of 4.5% in August, jumping by $1.20 year over year to reach $27.67. June and July showed comparable growth, with hourly earnings up 4.6% to $26.88 and 2.4% to $25.81, respectively. That August figure translates to roughly an annual salary of $57,553 for a full-time worker, which is good news for wage earners navigating these shifts.
Seasonally adjusted total nonfarm employment in the Prescott MSA hit 71,600 in August, a modest uptick of 200 (or 0.3%) from July. Employment has been fairly stable lately, dipping slightly from 72,000 in April to 71,400 in July before this small gain. Across Arizona, statewide employment experienced similar ups and downs, dropping by 15,200 in June but then adding 2,700 in July and 700 in August.
Non-seasonally adjusted total nonfarm employment in the Prescott MSA decreased by 0.4% year-over-year, landing at 71,300 in August. Most months in 2024 have reflected year-over-year losses, except for July, which bucked the trend with a 0.9% increase to 70,100. This volatility highlights how economic factors can swing job numbers unpredictably.
And this is the part that might surprise you: Looking at specific industries, some are thriving while others struggle. In the Prescott MSA, the Other Services sector led the pack with the strongest year-over-year growth in August, surging 3.8% to 2,700 jobs. Private Education and Health Services (+2.3%), State and Local Government (+2.1%), and Professional and Business Services (+1.4%) also posted healthy gains. On the flip side, Manufacturing took the biggest hit, plummeting 5.6% to 3,400 jobs, followed by Trade, Transportation, and Utilities (-3.7%). Other sectors with notable declines included Leisure and Hospitality (-2.0%) and Mining, Logging, and Construction (-1.4%). Meanwhile, Information, Financial Activities, and Federal Government stayed flat year-over-year. These differences can reveal where economic strengths lie – for example, growing health services might reflect an aging population or increased demand for care.
Retail sales, excluding food and gasoline, also showed some momentum in the Prescott MSA. Non-seasonally adjusted figures rose 3.4% year-over-year in August to $258.6 million. June and July had similar boosts, with growth of 1.5% to $272.3 million and 2.2% to $255.7 million, respectively. This uptick in spending could indicate consumer confidence holding steady despite job market challenges.
Finally, housing permits in the Prescott MSA have been on a rollercoaster ride lately. Non-seasonally adjusted total permits skyrocketed 147.4% year-over-year in June to 287, with single-family permits up 25.9% to 141. But things reversed in July, with total permits down 44.8% to 153 and single-family permits dropping 25.6% to 125. The trend continued downward in August, as total permits fell 20.3% to 118 and single-family permits decreased 3.3% to 118. These fluctuations might reflect uncertainty in the real estate market or shifts in housing demand.
So, what's your take on these trends? Do you see the shrinking workforce as a temporary hurdle or a call for new economic strategies? Is rising unemployment something that sparks innovation, or does it highlight systemic issues? Share your thoughts in the comments – we're eager to hear if you agree, disagree, or have a fresh perspective on Prescott's evolving labor landscape!
