The number of jobs in Arizona is only infinitesimally larger than it was a year ago, and the pace of hiring doesn't look as if it will pick up much in the second half of 2011.

Economists who had predicted in the spring that the state would add as much as 2 percent more jobs this year, or about 25,000 openings, have been ratcheting down their forecasts. The same analysts now are expecting only 10,000 to 12,000, according to Lee McPheters, an Arizona State University economist.

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In June, Arizona had 2.35 million jobs, only about 4,900 more than it had on June 30, 2010, McPheters calculates. That's a growth rate of 0.2 percent - virtually flat.

Government cutbacks caused by budget deficits appear to be a main drag on job growth.

While the private sector added 21,300 jobs in June compared with a year earlier, government jobs fell by 14,000 in the same period, according to the Arizona Department of Administration, the state agency that has taken over the monthly employment reports from the former Commerce Department. The drop in government jobs includes the loss of census positions since last year.

Also, businesses continue to lack confidence in the economy, locally and globally, which is slowing hiring, said Aruna Murthy, director of economic analysis for the department's Office of Employment and Population Statistics.

"Businesses are still relying on labor-productivity gains during the recession," she said, "and they are relying on making investments in capital rather than actually investing in people."

Arizona's unemployment rate rose slightly in June, to 9.3 percent, compared with 9.1 percent in May, in the latest state employment report released Thursday. The rate had fallen from March through May but now has bounced back to its April level.

The report does contain some hopeful signs, however. And many Arizonans are starting to sense improvement.

Arizona's job picture is much better than it was in the first six months of 2010, when the state lost 40,000 positions compared with the same period in 2009.

And job gains appear to be strengthening. The monthly average job gain in the first three months of the year was 3,933 over the total number of jobs in the same period a year earlier. In the second quarter, that monthly average grew to 5,900.

Sonya Serano, 29, has benefited from the recent job growth and thinks things are looking up.

"My husband got laid off, and we lost our house, and our credit is bad now," said Serano, who now works for a Phoenix call center. "He's been laid off for three years, but I think it's improving because more jobs are opening up. I just got a job, and he's babysitting. I've seen a lot of other people getting jobs."

Gina Bowser, 55, a cosmetologist, went back to school to get a graduate degree in social work at ASU and hopes that by the time the economy recovers, she can get a good job.

"It's improving, but you're going to have to have some specialized skills to get a job because I think the mom-and-pop jobs are going away," she said.

But the sluggish rate of growth makes it hard for others to accept the outlook is better.

David Jackson, 35, a self-employed Surprise resident, said, "The people that say it's improving, I don't know where those people live. I don't think they live where real people live. They are disconnected from the everyday life of most of us. In order for our economy to improve, we've got to create new wealth."

Drags on growth

In April, the Arizona Department of Commerce, which is now the public-private Arizona Commerce Authority, forecast a 0.7 percent job-growth rate this year. McPheters said the state will need much stronger gains later this year to reach half a percentage point.

Nationwide, job growth appears to have slowed, as the country added only 18,000 jobs in June, the U.S. Department of Labor said earlier this month. That was the smallest monthly gain in nine months.

"With the national economy barely adding jobs, Arizona is going to follow suit with continued slow growth, probably well into the second half," McPheters said.

State and national unemployment rates are based on surveys that ask people if they have looked for a job in the past month.

Traditionally, the jobless rate has risen after a recession as more people look for work, but McPheters said that doesn't appear to be happening this time. The number of people seeking jobs in Arizona has fallen by 6,700 from June 2010 to June 2011. The unemployment rate is rising, he believes, because not enough jobs are being created.

"Unemployment is going to stay at a high level until the Arizona economy starts creating more than a few thousand jobs," he said.

Uncertain future

Two sectors that did especially well in June were construction and manufacturing, according to the state report.

About 3,200 construction jobs were added from May to June, the largest monthly increase since October. That also was close to the 3,400-a-month average gain from 2001 through 2010.

"I think we reached a point where things (homes) just needed to be fixed," Murthy said.

Another highlight is the 700 jobs added in manufacturing from May to June, the fifth consecutive month of gains and the longest period of manufacturing job gains since a seven-month run in 2005.

According to the employment report, Arizona lost 57,200 jobs from May to June, but largely because the school year ended, putting 40,800 people temporarily out of work.

Food service and restaurants also shed 7,300 jobs, which Murthy said was because many schools outsourced cafeteria services to private companies.

Nevertheless, she said, it's worrisome that the 57,200 jobs lost in June were higher than the 10-year average of 36,400 monthly losses recorded from June 2001 through June 2010.

The continued weak job market creates an uncertain future, Murthy said.

"In relative terms, it (2011) is going to be better than the year before. But what the new norm is has yet to be determined."

Reach the reporter at betty.beard@arizonarepublic.com or 602-444-8667.