Gov. Hobbs touts Arizona economy, job growth

By Wayne Schutsky
Howard Fischer/Capitol Media Services
Published: Friday, March 15, 2024 - 2:57pm

Woman with blonde hair and glasses speaks into microphone
Howard Fischer/Capitol Media Services
Arizona Gov. Katie Hobbs speaks at a pre-legislative session event on Friday, Jan. 5, 2024.

Gov. Katie Hobbs is taking credit for the positive economic outlook in Arizona, citing high job growth and a dropping inflation rate — a factor economists say the governor has little ability to affect. 

According to the governor’s office, Arizona added nearly 82,000 jobs during Hobbs' first year and experienced a 2.6% growth rate in employment, which was 13% higher than the national rate. 

“I am thrilled to report that under my administration more Arizonans are working than at any point in state history,” Hobbs said.

In taking credit for that growth, the governor pointed to policies and programs pushed by her administration, including an initiative to increase the number of trade and construction apprentices in the state and a partnership with community colleges to train workers for jobs in technology and advanced manufacturing. 

But Hobbs also inherited an economy with some headwinds — notwithstanding high rates of inflation experienced by Arizona and other states coming out of the pandemic. 

Former Republican Gov. Doug Ducey was integral in attracting Arizona’s growing semiconductor industry and, as Arizona Commerce Authority CEO Sandra Watson pointed out, Arizona has the second-fastest manufacturing growth rate in the country since 2017 — when Ducey was still in office. 

But Watson, who also led the ACA during Ducey’s tenure, said Hobbs also deserves credit for the state of the current economy, saying Hobbs’ policies have been critical to attracting businesses and growing the state’s workforce.

“We've landed hundreds of projects under the governor’s leadership and administration, so a number of those new jobs that are available are really a result of her leadership,” Watson said. 

The governor’s office also noted that Arizona ranks fourth in the nation for job growth, up from 11th in 2022 during Ducey’s last year in office. 

Hobbs also touted a drop in the state’s inflation rate from 13% before she took office to 2.7% now.

It actually is even lower than that, with Hobbs using numbers for the Phoenix metro area from December. The most recent data from the Bureau of Labor Statistics puts the annual rate of inflation at 2.3%, compared with 8.5% a year earlier.

But whatever the numbers, the governor would not provide a single example of anything she has done in her 14 1/2 months in office to actually bring down prices –  or even anything that she could do as the governor.

"We're doing a lot to lower prices for Arizonans,'' Hobbs said.

But Arizona economists said there really is little any governor can do to meaningfully affect prices paid by local residents. In fact, Lee McPheters, a research professor at the Seidman Research Institute at Arizona State University, called any such claim "dubious at best.''

Gubernatorial press aide Christian Slater disputed that assessment.

"The results speak for themselves,'' he said, saying that Arizona went from having one of the higher inflation rates in the nation to now one below the national average. "We did not get here by accident.''

But economist Jim Rounds said that's not exactly how it works.

"Part of it is some simple math,'' he said.

"We had a higher rate of inflation than the U.S. for a while,'' he said. "That means that to get back down to normal, we have to have a lower rate of inflation than the U.S. for a while.''

And the rate of inflation has been dropping nationally.

Rounds did say that things like economic development, which he said Hobbs has been pushing, can have some impact at the state level. But he said that, given the complex nature of inflation, the effect would be "at the margins."

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