Phoenix remains Arizona’s leading economic engine

Exhibit 1 presents current Phoenix-Mesa-Chandler MSA economic indicators.

In December, the non-seasonally adjusted civilian labor force in the Phoenix-Mesa-Chandler MSA (Phoenix MSA) grew 2.6% over the year to 2.8 million, continuing an upward trend. September and November recorded similar year-over-year gains of 2.7% and 2.9%, respectively.

The Phoenix MSA’s labor market showed solid strength in December, as non-seasonally adjusted resident employment climbed 2.1% year-over-year to 2.7 million. September and November both posted similar gains of 1.9% and 2.4%, respectively. Statewide, Arizona employment grew 1.9% over the year to 3.7 million, with the Phoenix MSA accounting for approximately 73.0% of the state’s total employment. 

The non-seasonally adjusted unemployment rate in the Phoenix MSA has fallen in recent months but remains above the low rates of 2024. In November and December, unemployment rates increased year over year by 0.5 and 0.4 percentage points to 3.8% and 3.5% respectively. However, these unemployment rates are significantly below the highs of 4.1% in July and September and 4.2% in August. At the state level, the non-seasonally adjusted unemployment rate increased by 0.4 percentage points over the year to 4.0% in December.

Seasonally adjusted total nonfarm jobs in the Phoenix MSA rose 0.1% in December, adding approximately 6,400 jobs to reach 2.7 million. Recent months have shown straight gains, with employment rising by 3,000 in September, 7,300 in October, and 800 in November. Statewide, Arizona added 6,400 jobs to reach 3.3 million, with the Phoenix MSA accounting for 75.7% of the state’s total seasonally-adjusted jobs.

Non-seasonally adjusted nonfarm employment in the Phoenix MSA rose by 0.9% year-over-year in December, reaching 2.5 million jobs. This rise follows year-over-year gains of 1.3% in October and 0.8% in November. Among major industries, Mining and Logging posted the largest year-over-year percentage increase, rising 8.1% to 4,000. Other notable growth also occurred in Professional and Business Services (2.9%), Other Services (2.3%), Construction (2.0%), and Financial Activities (1.0%), On the other hand, the Government sector experienced the steepest decline, falling 3.0% to 253,200. Losses were also noted in Trade, Transportation, and Utilities (-1.0%), Manufacturing (-0.9%), and Information (-0.5%).

Non-seasonally adjusted average hourly earnings in the Phoenix MSA continued to rise through 2025, increasing by 4.5% over the year in December to $36.99. Growth remained consistent with prior months, as wages were up 6.1% in October and 6.8% in November. At December’s rate, average full-time annual earnings equate to roughly $76,939.

Retail sales excluding food and gasoline rose 4.3% over the year in December, reaching $8.4 million. All taxable sales saw increases over the year in December, with Restaurant and Bars sales rising 5.2% to $1.5 million, Gasoline increasing 5.9% to $534,400, Hotel/ Motel growing 5.7% to 280,500, and Amusements jumping 5.8% to 163,700.

In October 2025, Phoenix MSA housing permits declined 12.3% over the year, posting their third consecutive significant decline. Single-family permits drove the over-the-year decrease in October. Overall, Phoenix housing permits are on track to post a significant decline in 2025.

Phoenix MSA house sales and house prices are temporarily unavailable.

Exhibit 1: Phoenix-Mesa-Chandler MSA Monthly Economic Indicators