PHOENIX -- The state's jobless rate inched down just a bit last month amid weaker than expected showing in retail and health care employment.
New figures for February put the unemployment rate at 7.9 percent, a decline of one-tenth of a percent. And, on paper, the state did add 22,900 jobs from January.
But economist Aruna Murthy of the state Department of Administration, said that is below what is normally expected this time of the year.
The state's retail sector shed 5,000 jobs month over month as stores are selling less and, as a result hiring fewer staffers.
``It's a reflection of the economy,' Murthy said.
``People are still worried,' she continued. ``People are not spending as much as they typically do.'
Murthy said some of that uncertainty is the inability of the federal government to reach a deal over mandatory budget cuts. At the same time, there was a 2 percentage point increase in payroll taxes, meaning smaller paychecks.
But Murthy said the problem could be more long term as shopping habits change. She said the experience of the past Christmas season showed a jump in people buying items online.
``As a result, they didn't go to a retail store,' she said. And that, in turn, also means traditional brick-and-mortar shops are curtailing their hiring.
Backing up that shift in the economy is the fact that wholesale trade employment in Arizona added 1,500 jobs last month. And overall employment is approaching 102,000, a 6.2 percent increase over the same time a year earlier.
Murthy said that's a reflection of an increase in the number of firms that have set up warehouses and distribution centers in Arizona. And many of them are shipping directly to customers.
That trend, she said, is likely to continue, as younger shoppers who are becoming a larger sector of the spending population are quite comfortable buying things online.
The other area of some concern is the slowing growth in health care employment.
That is the one sector of the Arizona economy that weathered the recession quite nicely. In fact, employment continued to grow even as other industries were shedding workers.
Last month, however, it lost 1,000 jobs. And year-over-year growth has slowed to just 1.8 percent, as low as it's been since the recession began.
``It's very perplexing to me,' Murthy said.
One possible explanation, she said, is uncertainty over exactly what the federal Affordable Care Act will mean -- and even if it really will be implemented. Murthy said only when the terms of the program become better understood will companies decide how many doctors and nurses they will need.
At the same time, Murthy said the state's population growth which stalled during the recession also has not picked up. Fewer people to serve, she said, means fewer health professionals needed.
One strong sector of the economy remains bars and restaurants which added another 3,600 staffers last month and 7,700 over the same time a year earlier. Murthy said this is tied to the timing of spring training and other events, as is an increase in employment in entertainment and recreation.