Retail climbs while jobs and housing stumble

Exhibit 1 presents current Tucson MSA economic indicators.

In December, the non-seasonally adjusted civilian labor force in the Tucson MSA (Pima County) grew 1.7% year-over-year to 502,936. This continues a steady upward trend, with year-over-year increases in each recorded month so far in 2025. In September, the labor force grew 2.5% to 510,321, followed by a 2.7% gain in November to 509,425.

In the Tucson MSA, the non-seasonally adjusted unemployment rate rose 0.7 percentage points over the year to 4.1% in December. Every recorded month of 2025 has observed year-over-year increases in unemployment. March saw the largest gain, up 1.1 points to 4.1%, followed by a 0.9-point increase in May to 4.2% and in September to 4.7%. Statewide, the unemployment rate increased 0.5 percentage points over the year to 4.0% in December.

Seasonally adjusted nonfarm employment in the Tucson MSA declined slightly in December, falling 0.4% over the month to 396,400. Employment saw slight gains in September of 0.5% to 400,400, remained stable in October at 400,000, and then declined in November by 0.5% to 398,100.

Non-seasonally adjusted nonfarm employment in the Tucson MSA showed year-over-year growth in October and November before declining in December. Employment rose by 0.6% in October to 402,400 and by 0.2% in November to 388,700 before declining 0.5% in December to 403,000.

Among December’s industry-level data, the strongest year-over-year gain in the Tucson MSA was in Mining and Logging, which rose 11.5% to 2,900. Other Services followed with a6.7% increase, reaching 15,900 jobs. Other notable gains include Private Education and Health Services (4.8%), Leisure and Hospitality (1.5%), and Financial Activities (1.7%).

On the flipside, the largest year-over-year decline in the Tucson MSA was in Professional and Business Services, with employment falling 4.0% to 43,100. Additional losses occurred in Information (-3.9%), Government (-3.6%), Construction (-3.4%), Manufacturing (-2.5%), and Trade, Transportation, and Utilities (-1.9%).

Retail sales excluding food and gasoline in the Tucson MSA rose 2.7% year over year in December, reaching $1.4 billion. Restaurant and bar sales observed smaller growth patters in December, rising 1.1% to $251.0 million. Gasoline sales increased in both November by 7.0% to $113.1 million and December by 5.2% to $107.3 million. Amusement sales posted the strongest gain over the year in December, rising 15.3% to $16.9 million, while hotel and motel sales observed the only loss, falling 0.3% to $46.8 million.

Tucson MSA non-seasonally adjusted housing permits rose modestly in November and significantly in December 2025 (over the year). The large December increase was driven entirely by multi-family permits, because single-family permits declined. According to the preliminary data, on average in 2025, total housing permits fell 11.3% from 2024, driven by a 13.6% decrease in single-family permits. Multi-family permits were down modestly, by 2.3%.

The Tucson MSA’s housing market has seen mixed results in the last months of 2025; units sold declined in both October and November before rising 3.1% year over year to 1,093 in December. On the other hand, Median Home sale Price saw minor gains in October and November before falling 1.8% in December to $353,630.

Exhibit 1: Tucson MSA Monthly Economic Indicators