Arizona Jobs End the Year on a Soft Note
By George Hammond, EBRC research professor
Manufacturing jobs still down over the year
Arizona added 6,400 seasonally-adjusted jobs over the month in December 2025, much better than the 4,100 job loss in November. The state unemployment rate (seasonally adjusted) was unchanged in December at 4.3%, slightly below the nation at 4.4%.
Arizona over-the-month job gains in December were driven by construction (up 3,900); leisure and hospitality (up 1,900); trade, transportation and utilities (up 1,500); private education and health services (up 1,200); financial activities (up 700); and natural resources and mining (up 100); and information (up 100).
Jobs were down over the month in government (down 1,500); manufacturing (down 900); professional and business services (down 500); and other services (down 100). Government job losses in December were concentrated in state government. Manufacturing losses were in durable goods.
Over the year in December, Arizona jobs were up 24,600, which translated into 0.7%. That was faster than the U.S. rate of 0.3%.
Over the year job gains were largest in December for private education and health services, followed by professional and business services; construction; and leisure and hospitality. Four sectors lost jobs: government; trade, transportation, and utilities; manufacturing; and information (Exhibit 1).
Exhibit 1: Arizona Net Job Change (Thousands) and 2024 Annual Wages per Worker
The preliminary estimates for 2024 and 2025 suggest that the state added just 17,100 jobs last year, for 0.5% growth (not seasonally adjusted). That was slower than the preliminary national pace of 0.9%. These preliminary estimates will be revised in March.
Phoenix MSA jobs rose 21,700 over the year in December, accounting for 88.2% of state job growth. That translated into growth of 0.9%. Preliminary estimates for 2024 and 2025 suggest that Phoenix added 14,200 jobs in 2025, for 0.6% growth (not seasonally adjusted). These preliminary estimates will be revised in March.
Tucson MSA jobs dropped 1,900 over the year in December. That translated into a decrease of 0.5%. Preliminary estimates suggest that Tucson jobs were roughly stable on average last year, compared to 2024 (not seasonally adjusted0. These preliminary estimates will be revised in March.
Prescott MSA jobs fell 100 over the year in December, which translated into a 0.1% decline. Preliminary estimates indicate that Prescott lost nearly 400 jobs in 2025, compared to 2024. That was a drop of 0.5% (not seasonally adjusted). These preliminary estimates will be revised in March.
