The Prescott job market is facing a surprising twist: a shrinking workforce is putting the brakes on its once-thriving economy. But here's where it gets concerning: despite a recent uptick, the number of people working or actively looking for work remains significantly lower than last year, according to a recent analysis by the Economic and Business Research Center, Arizona's go-to source for economic insights since 1949.
Let's break down the numbers. In August, Prescott's labor force hovered around 106,966, barely budging from the previous month. While this marks a slight recovery from a dip earlier in the year, it's still 3.0% smaller than the same time last year.
This trend is reflected in employment figures. The number of residents with jobs dipped slightly in August, continuing a downward slope throughout 2024. Year-to-date, employment is down 3.6% compared to 2023.
And this is the part most people miss: unemployment, while still relatively low at 4.0%, has been steadily climbing since January, both in Prescott and across Arizona.
Interestingly, wages are on the rise. Hourly earnings in Prescott jumped 4.5% in August compared to last year, reaching $27.67 – roughly equivalent to an annual salary of $57,553 for a full-time worker.
The picture for businesses is mixed. While total nonfarm employment saw a modest increase in August, it's been largely stagnant in recent months. Some sectors, like Other Services, Education, and Healthcare, are experiencing growth, while others, like Manufacturing and Leisure and Hospitality, are facing declines.
Even retail sales, excluding food and gasoline, showed a healthy 3.4% increase in August, suggesting consumers are still spending. However, the housing market tells a different story, with permit activity fluctuating wildly in recent months.
Is this a temporary blip or a sign of a deeper shift in Prescott's economy? The arrival of TSMC, a major semiconductor manufacturer, promises to bring thousands of jobs to Arizona. How will this massive investment impact Prescott's labor market? Will it attract new workers or exacerbate existing shortages?
The future of Prescott's economy is at a crossroads. While wage growth is positive, the shrinking workforce and rising unemployment raise questions. What do you think? Is Prescott headed for a period of economic adjustment, or will it find a way to thrive in this new landscape? Let us know your thoughts in the comments below.
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