Arizona's Labor Market: A Subtle Shift in the Desert Winds

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Population & Demographics

Arizona's population as of Census 2020 was 7,151,502, up 11.9% from 2010 making Arizona the 9th fastest-growing state over the decade. All Arizona counties saw population gains from 2010 to 2020 except La Paz (-19.2%), Apache (-7.7%), Cochise (-4.5%), Navajo (-0.7%), and Gila (-0.6%). The strongest population growth from 2010 to 2020 of Arizona's 15 counties was Maricopa (+15.8%), followed by Greenlee (+13.3%), Pinal (+13.2%), and Yavapai (+11.9%). Maricopa County accounted for 80% of the statewide population gains from 2010 to 2020.

Arizona's population growth over the past several decades has been both steady and substantial, with the most recent years continuing this long-term trend.

Long-Term Growth

Arizona's population has more than doubled since 1980, when it was about 2.7 million. In 2025, the population was estimated at nearly 7.72 million residents.
The growth has been consistent, with the state adding hundreds of thousands of new residents each decade. For example, between 2000 and 2010, Arizona grew from about 5.18 million to 6.40 million, and from 2010 to 2020, it increased to over 7.17 million.

Recent Trends (2015–2025)

In the last decade, Arizona has added over 1 million residents, growing from 6.7 million in 2015 to 7.7 million in 2025.
Annual growth rates have ranged from about 1.3% to 1.7%, with the highest increases occurring between 2021 and 2022, when the state added over 120,000 people in a single year.
Growth has remained robust even as it has moderated slightly in the most recent years, with annual increases of around 95,000 to 115,000 people from 2023 to 2025.

Regional Patterns

The majority of Arizona's population growth is concentrated in its largest counties, especially Maricopa (home to Phoenix) and Pima (home to Tucson).
- Maricopa County alone grew from 4.44 million in 2020 to 4.79 million in 2025, accounting for nearly two-thirds of the state's net growth.
- Pima County increased from 1.61 million to 1.71 million in the same period, making up about 18% of the state's growth.
Other counties such as Yavapai, Yuma, and Pinal have also seen notable increases, but their contributions are much smaller compared to Maricopa and Pima.
Many rural counties have experienced only modest growth or have remained relatively stable, highlighting the urban-centric nature of Arizona's expansion.

Urbanization and Metro-Led Expansion

The Phoenix metropolitan area continues to be the primary engine of growth, attracting new residents due to economic opportunities, climate, and lifestyle.
Tucson and its surrounding areas also contribute significantly, though at a smaller scale.
Suburban and exurban communities around these metro areas, such as Gilbert, Chandler, and Queen Creek in Maricopa County, have seen especially rapid growth, reflecting broader national trends toward suburbanization.

Projections

According to the Arizona Office of Economic Opportunity's Medium Series projections (published December 18, 2025), Arizona's population is expected to grow from approximately 7,718,700 in 2025 to 9,750,600 by 2060. Most of this growth will occur in the Phoenix metro area, which is projected to increase from 5,289,900 to 7,167,000. Tucson's metro area will see slower growth, rising from 1,093,800 to 1,143,600. The rest of the state will experience modest increases, while some rural counties may remain stable or decline.

Labor Market

Recent Labor Market Trends in Arizona

Arizona's labor market has experienced notable shifts over the past few years, with the most recent data (January–March 2026) indicating a gradual softening of conditions:

Labor Force: After steady growth from 2020 through 2025, the civilian labor force peaked at over 3.8 million in late 2025. However, in early 2026, the labor force began to contract slightly, dropping from 3,814,212 in January to 3,783,523 in March 2026.
Employment: Employment followed a similar pattern, rising consistently through 2025 but declining in early 2026—from 3,642,816 in January to 3,607,054 in March. This suggests fewer people are working, either due to job losses or individuals leaving the workforce.
Unemployment: The number of unemployed individuals has increased modestly in 2026, from 171,396 in January to 176,469 in March. This is a reversal from the relatively stable or declining unemployment seen in previous years.
Unemployment Rate: The unemployment rate has edged up each month in 2026, from 4.5% in January to 4.7% in March. This is higher than the 4.2–4.4% range seen throughout 2025, and a continued increase from the low rates (as low as 3.4%) observed in 2024.

Overall, Arizona's labor market is showing early signs of strain in 2026, with a shrinking labor force, declining employment, and a rising unemployment rate. These trends mark a shift from the steady recovery and growth seen after the pandemic-related disruptions of 2020, and may signal emerging economic challenges for the state.

Arizona Employment Trends

Arizona’s job market continues its steady climb, with recent employment figures painting a picture of resilience and gradual transformation across key sectors

Steady Job Growth: Total nonfarm employment in Arizona increased from 3.16 million in January 2023 to 3.27 million in March 2026, reflecting ongoing economic expansion.
Leading Sectors:
- Healthcare and Social Assistance: Grew from 431,200 jobs (Jan 2023) to 487,600 (Mar 2026), making it the largest and fastest-growing sector.
- Construction: Rose from 205,300 (Jan 2023) to 224,200 (Mar 2026), indicating strong demand for housing and infrastructure.
- Leisure and Hospitality: Recovered from pandemic lows, reaching 367,700 jobs in Mar 2026.
Stable or Plateauing Sectors:
- Manufacturing: Remained steady, around 192,000–196,000 jobs.
- Retail Trade: Plateaued, with minor declines (from 345,900 in Jan 2023 to 342,900 in Mar 2026).
- Information: Slight decrease, from 52,200 (Jan 2023) to 48,800 (Mar 2026).
Government Employment: Stable, with local government jobs increasing from 268,500 (Jan 2023) to 281,300 (Mar 2026).

Personal Income

In 2025, Arizona had a per capita personal income (PCPI) of $68,283. This PCPI ranked 35th in the United States and was 89.4% of the national average, $76,393. The 2025 PCPI reflected an increase of 3.4% from 2024. The 2024–2025 national change was 4.3%.
Back in 2015, the PCPI of Arizona was $39,888 and ranked 41st in the United States. The 2015–2025 compound annual growth rate of PCPI was 5.5%. The compound annual growth rate for the nation was 4.7%.
Over the past decade, Arizona's real per capita personal income (adjusted for inflation, in chained 2017 dollars) has shown a clear pattern of steady growth, a pandemic-driven surge, a sharp inflation-related decline, and a partial recovery. From 2015 to 2019, real per capita income rose from $41,960 to $47,236, reflecting consistent economic expansion. The pandemic years brought rapid gains, peaking at $54,424 in 2021. However, in 2022, real per capita income dropped sharply to $50,935 due to inflationary pressures. The most recent years show modest recovery, with real per capita income reaching $52,890 in 2024. Despite this rebound, individual purchasing power remains below its 2021 peak, highlighting the lingering effects of inflation and the challenge of fully restoring per-person economic gains.

For more info on Arizona's personal income and GDP, check out the state's BEA Regional Fact Sheet (BEARFACTS)

Gross Domestic Product (GDP)

In 2023, Arizona current-dollar GDP was 522,767.2 million and ranked 17th in the United States. In 2013, Arizona GDP was 278,679.5 million and ranked 22nd in the United States.
In 2023, Arizona real GDP grew 3%; the 2022–2023 national change was 2.9%. The 2013–2023 compound annual growth rate for Arizona real GDP was 3.5%; the compound annual growth rate for the nation was 2.4%.
In 2023, the largest industry in Arizona was finance, insurance, real estate, rental, and leasing. This industry accounted for 23.6 percent of Arizona GDP and had 0.9 percent real growth. The second largest industry was professional and business services, which accounted for 11.7 percent of Arizona GDP and had 2.9 percent real growth.
The largest contributor to real GDP growth in Arizona was retail trade. This industry accounted for 0.71 percentage point of the total growth in real GDP. The second largest contributor to real GDP growth was educational services, health care, and social assistance. This industry accounted for 0.62 percentage point of the total growth in real GDP.

For more info on Arizona's personal income and GDP, check out the state's BEA Regional Fact Sheet (BEARFACTS)

Major Industry Sales & Bank Deposits

MAJOR INDUSTRY SALES

In 2025, Arizona's retail sales totaled $105.9 billion, up 2.7% from the year prior following a 0.3% decline in 2024. That was after gains of 19.0% in 2021, 7.9% in 2022, and 2.6% in 2023. Retail sales in 2025 were at a record high (with records back to 2009).
Restaurant & bar sales statewide totaled $23.2 billion in 2025, up 3.1% from the year prior. That followed growth of 28.6% in 2021, 18.0% in 2022, 6.2% in 2023, and 2.4% in 2024 (that was after a COVID-related decline of 13.5% in 2020). Restaurant & bar sales in 2025 were at a record high (with records back to 2009).
Arizona's hotel/motel receipts totaled $5.5 billion in 2025, down 1.4% from the year prior. That followed gains of 44.1% in 2021, 32.8% in 2022, 6.9% in 2023, and 0.7% in 2024 (rebounding from a 28.5% COVID-related drop in 2020). Arizona's hotel/motel receipts were at a record high in 2024 (with records back to 2009) before declining in 2025.

BANK DEPOSITS

In 2025, bank deposits in Arizona (as of June 30) totaled $220.8 billion, up 4.0% from the year prior, after increasing 1.7% in 2024 following an 8.3% decline in 2023. That followed strong growth of 21.6% in 2020, 18.1% in 2021, and 11.8% in 2022.
Growth rates over the three years from 2020 through 2022 were the highest of any three-year period on record (with records back to 1994). Deposits in those years were helped along by stimulus payments and other COVID programs. Arizona total bank deposits in 2025 were down 3.1% from the record high in 2022.

Real Estate & New Home Construction

HOME SALES, PRICES & DAYS ON MARKET: In 2024, home sales in Arizona were down 0.7% from the year prior, following declines of 21.7% in 2022 and 14.0% in 2023, according to data from Arizona Regional Multiple Listing Service. Home sales in 2024 were at their lowest level in more than a decade. The median price of homes sold in Arizona in December 2024 was $450,000, up 4.7% from December 2023. The average cumulative days on market for homes sold in December 2024 was 77, up from 62 a year prior. For the most recent Arizona housing market data, click here.

NEW HOME CONSTRUCTION: In 2024, there were 41,944 building permits issued for new single-family homes in Arizona, up 21.8% from 2023. The average permit value in 2024 was $294,831 (does not include value of land), up 1.9% from the year prior. See downloadable spreadsheets below for current and historical annual building permit data.

Tourism Visitor Counts & Travel Impacts

TOURISM VISITOR COUNTS

In 2024, visits to national parks in Arizona (including national monuments, memorials, and sites) totaled 14.2 million, up 1.1% from the year prior. That was on the heels of a 14.1% increase in 2023 after visits fell 6.5% in 2022 (following a 37.2% jump in visitors in 2021, rebounding from the COVID-related decline of 35.0% in 2020, the first year of the pandemic). Despite increases in 3 of 4 years from 2021 through 2024, visits in 2024 were still down 3.8% from 2019, the year prior to the pandemic.
Visits to state parks in Arizona totaled 3.1 million in 2024, up 0.8% from the year prior. That was after increasing 2.1% in 2023 (following declines of 0.3% in 2022, 2.8% in 2021 and 5.6% in 2020, the first year of the COVID pandemic). Visits in 2024 were down 0.4% from 2019, the year prior to the pandemic.

Click here for the most recent monthly and annual visitor counts for all Arizona state and national parks.

Cross-border Economy

BORDER CROSSINGS: In 2024, pedestrian border crossings from Mexico into the United States at Arizona land ports of entry were up 7.7% on the heels of increases of 11.5% in 2021, 26.7% in 2022, and 12.7% in 2023 (that followed a 44.7% drop in 2020, the first year of the COVID pandemic). Despite increases in recent years, the number of pedestrian crossers in 2024 remained 5.1% below the pre-COVID year of 2019. The number of personal vehicle passengers arriving from Mexico through Arizona land ports was up 3.1% in 2024, following increases of 31.4% in 2021, 36.6% in 2022, and 0.3% in 2023 (after falling 42% in 2020). With the recent increases, vehicle passenger border crossings at Arizona land ports in 2024 were up 7.6% from 2019. See downloadable spreadsheets below for current and historical border crossing data for bus passengers, buses, pedestrians, personal vehicle passengers, personal vehicles, truck containers [empty and loaded], and trucks at Arizona ports of entry.

INTERNATIONAL TRADE: In 2024, the total value of international trade (imports and exports) passing through Arizona ports of entry was $38.7 billion, up 7.6% from 2023. Exports totaled $12.4 billion (up 4.1%) while imports came in at $26.3 billion (up 9.3%). See downloadable spreadsheets below for current and historical international trade data (imports, exports, and total trade) at Arizona ports of entry.

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