The Prescott labor market is showing signs of cooling, a trend primarily driven by a shrinking workforce. Let's delve into the details, shall we?
According to analysis from the Economic and Business Research Center, a key source for Arizona's economic insights since 1949, the Prescott Metropolitan Statistical Area (MSA) paints a nuanced picture.
In August, the seasonally adjusted civilian labor force in the Prescott MSA hovered around 106,966, essentially remaining flat compared to the previous month. While there was a slight recovery after a dip from 107,062 in April to 106,855 in May, the labor force is still 3.0% smaller than it was last year. This suggests fewer people are actively seeking employment or are available to work.
Resident employment, also seasonally adjusted, dipped slightly to 102,648 in August, a decrease of 49 from July. This downward trend has been consistent throughout 2024, falling from approximately 106,673 in December 2023. Year-to-date, resident employment is down 3.6% compared to the same period last year.
Unemployment figures also present a concerning trend. Seasonally adjusted unemployment rose by 55 individuals, or 1.2%, in August, reaching 4,318. This follows increases observed in nearly every month of 2024, starting from 3,851 in January. Compared to last year, resident unemployment has increased by a substantial 13.6%. Arizona's statewide unemployment mirrored this pattern, increasing by 7.1% from January to August.
But here's where it gets controversial... The unemployment rate in the Prescott MSA held steady at 4.0% in August, after gradually climbing from 3.6% in January. Arizona's statewide rate followed a similar trajectory, starting at 3.9% and reaching 4.1%, where it remained for several months.
Looking at wages, non-seasonally adjusted hourly earnings in the Prescott MSA saw a 4.5% increase in August, rising by $1.20 year-over-year to $27.67. This wage translates to an annual salary of approximately $57,553 for a full-time worker.
Total nonfarm employment in the Prescott MSA reached 71,600 in August, up by 200 jobs (or 0.3%) from July. Employment has been relatively stagnant in recent months, with slight fluctuations. Arizona's statewide employment showed similar volatility.
Non-seasonally adjusted total nonfarm employment in the Prescott MSA decreased by 0.4% year-over-year to 71,300 in August. Most months in 2024 have shown year-over-year declines, with July being the lone exception, posting a 0.9% gain.
Analyzing specific industries, "Other Services" showed the most robust year-over-year growth, increasing by 3.8% to 2,700 jobs. Other sectors, such as Private Education and Health Services, also showed solid growth. Conversely, Manufacturing experienced the largest year-over-year decline, falling by 5.6% to 3,400 jobs in August.
Retail sales (excluding food and gasoline) in the Prescott MSA increased by 3.4% year-over-year in August, reaching $258.6 million.
And this is the part most people miss... Housing permits in the Prescott MSA have shown significant volatility. Total permits surged by 147.4% year-over-year in June, but then decreased in July and August. This fluctuation could indicate instability in the housing market.
What do you think these trends mean for Prescott's future? Do you see these changes as a cause for concern, or are there underlying factors that might paint a different picture? Share your thoughts in the comments below!
