Flagstaff MSA May 2026 Summary
By Delaney O’Kray-Murphy, EBRC Research Economist
The Flagstaff MSA saw rising unemployment through Q1 2026, though retail sales offered a bright spot.
Exhibit 1 presents current Flagstaff MSA (Coconino County) economic indicators.
In March, the non-seasonally adjusted civilian labor force in the Flagstaff MSA (Coconino County) fell 2.4% year over year to 74,120. January recorded minor gains of 0.4% over the year to 76,091, while February recorded a loss of 1.8% to 74,259.
Non-seasonally adjusted resident employment in the Flagstaff MSA saw declines in the first quarter of 2026, with employment falling 0.7% year over year in January to 71,654, 2.8% in February to 70,093, and 3.1% in March to 70,532. Statewide, employment fell 2.1%, or -74,852, year over year in March to 3.6 million.
Non-seasonally adjusted resident unemployment in the Flagstaff MSA rose in the first quarter of 2026. January showed the largest gain of 23.4% over the year to 4,437, while February rose 19.1% to 4,166 and March rose 14.0% to 3,588.
The non-seasonally adjusted unemployment rate in the Flagstaff MSA showed year-over-year decreases in the first three months of 2026. In February, the unemployment rate came in at 5.6%, a 1.0 percentage point increase from a year prior, and in March, the rate rose 0.7 percentage points to 4.8%. At the state level, the unemployment rate increased 0.7 percentage points over the year in February to 4.7%, and 0.5 percentage points in March to 4.4%.
Non-seasonally adjusted average hourly earnings in the Flagstaff MSA rose in January but saw year-over-year declines in both February and March. Earnings rose 0.7% in January to $25.64 before falling 1.1% in February to $25.41 and 0.3% in March to $25.41. At March’s rate, average full-time earnings equate to roughly $52,852.
Seasonally adjusted nonfarm payroll jobs saw declines in January and February, but no change in March. January employment fell 0.3% over the month to 71,000, and February similarly decreased 0.3% to 70,800. Employment in March remained at 70,800.
Non-seasonally adjusted nonfarm employment in the Flagstaff MSA fell by 1.4% year-over-year in March, settling at 70,600. January and February showed similar year-over-year declines, with January falling 0.7% to 70,300 and February decreasing 1.1% to 70,500. Among major industries, Government posted the most significant year-over-year decrease in March, dropping 6.2% to 18,100. Other notable decreases occurred in Manufacturing (-5.1%), Mining, Logging, and Construction (-3.1%), and Trade, Transportation, and Utilities (-2.0%). Other services saw the most significant year-over-year gain in March, rising 5.9% to 1,800. Other gains occurred in Financial Activities (5.6%), Professional and Business Services (2.3%), Private Education and Health Services (1.9%), and Leisure and Hospitality (1.2%).
Retail sales less food and gasoline rose 18.8% year over year in March, reaching $172.0 million. Hotel/ Motel sales saw the most significant gains, rising 10.9% to $65.3 million, followed by Restaurant and Bar sales, totaling $68.9 million. Amusements saw a slight decrease of 5.1% over the year to $16.1 million.
In March, non-seasonally adjusted housing permits in the Flagstaff MSA declined year-over-year in February and March for both total and single-family units. Total units fell by two over the year to 32 in February and by 81 over the year in March to 35, while single-family permits similarly fell by two in February to 32 and by six in March to 35.
Exhibit 1: Flagstaff MSA Monthly Economic Indicators
