High-unemployment rates hit Arizona and the West harder than the rest of the United States, according to the latest Western Blue Chip Economic Forecast.
"Rate increases were largest in the West and [specifically] Arizona, Colorado and New Mexico," said Lee McPheters, associate dean of the ASU MBA program.
According to the U.S. Bureau of Labor Statistics, unemployment rates in July for Arizona were 6 percent, compared to the national average of 5.7 percent.
The unemployment rate was also broken down for individual cities within each state.
Yuma, Ariz., had a 32.3-percent unemployment rate, the highest in the country for July.
"Those of us in the East Valley are doing better than the West Valley," said Dawn McLaren, research economist with the Bank One Economic Outlook Center.
Danny Johnson, a bioengineering senior, who works in a guitar shop in the Valley, hasn't been directly affected by high unemployment but said he has seen the impact around work, and with his family and friends.
"I am not worried about losing my job right now, but I have seen other companies around where I work make a lot of cutbacks," Johnson said.
The unemployment rate for Tempe and Mesa was 4.7 percent compared to 6.1 percent for Phoenix and 5.5 percent in Glendale.
McLaren said the West's high-unemployment rate could be attributed to cutbacks in major western industries.
People are afraid of losing money in a weak economy so they stop manufacturing and building which hurts the economy, she said.
McLaren added that manufacturing, construction and tourism are important industries to Arizona, and those were the areas that were most affected.
"Manufacturing is concentrated in Washington, Arizona and California," McLaren said. "Construction is primarily in Utah, Oregon, Washington, and Arizona."
Tourism was hurt largely because of Sept. 11, 2001, and is particularly important to Tempe, McLaren said.
"We really rely on tourism and when the recession hit it looked like we would fair OK, then September 11 happened and people got scared," McLaren said.
This recession strongly affected Arizona she said. It started around August, but really hit Arizona in December she added.
"Mid 2001 things started going wrong but the bottom fell out in December," McLaren said.
According to an analysis in the forecast, the West led the nation in job creation during the 1990s.
Arizona fluctuated from first and second place from 1993 until 2001, she said.
"We were 40th in July of 2002," McLaren said.
McLaren said there isn't much Arizona or any state can do about the recession that is causing the high-unemployment rates.
"There is not much within their [state's] power," said McLaren.
The federal government has a little control with interest rates, but the real problem is overcoming peoples fear for the economy, she explained.
Tracy Clark, ASU economist for Bank One Economic Outlook Center, said technology spending, time and people feeling secure is what will get the nation past this economic downshift.
"It's partly a matter of time," Clark said. "We must decrease uncertainty, past war with Iraq, and accounting scandals."
He said unemployment rates would decrease and the economy would get better once those things are out of the system.
McLaren agreed with Clark and said uncertainty is not good for the economy and we are facing uncertainty when it comes to war with Iraq, corporate conduct, and the future of consumer and business spending.
Sam Stevens, an anthropology junior, said he is worried about finding a job when he graduates next year if this trend continues.
"I know lots of people who aren't able to work in their major after they graduate," Stevens said. "I am afraid I will have to work at Basha's or a used car dealership."
Reach the reporter at samantha.xanthos@asu.edu.
