A new report shows Arizona’s job market and labor force is a mixed bag.
The Common Sense Institute found 4,300 non-farm jobs were added in February. That puts Arizona at No. 15 among all states in terms of monthly job growth.
Still, the year-over-year growth fell 0.4% and is the state’s second year-over-year job decline since March 2021.
“For the first time since 2021, Arizona’s year-over-year job growth has been negative in the first two months of 2025,” Glenn Farley, CSI Arizona’s director of policy and research, told The Center Square. “Job growth in the state has been slowing since early 2024, and the state’s labor market never recovered to where it was before the pandemic.”
Farley added that “the trend has been working against us,” and he recommended people watch for improvement.
“The monthly job growth numbers provide real-time insight into the health of the state’s labor market, which in turn provides over half of the state’s total income,” said Farley. “The real-time jobs and unemployment figures are also a useful indicator of the overall health of the economy.”
For example, Farley said that a decline in manufacturing job growth was a first sign that the boom in American manufacturing that began back in 2017 might be slowing down.
When asked what governments can do for improvements, Farley said local, state and federal governments can make it faster and easier to hire and retain workers by cutting red tape and enacting policies that promote population growth.
“Low housing costs can increase the supply of workers available in an economy, since the labor force is tied to total population,” Farley said.
Earlier this month, CSI issued a report stating that, even with a recent decline in the overall housing shortage, the state’s housing market continues to face affordability and supply challenges.
“You have very high prices, very high interest rates, and it is the worst affordability crisis arguably in state history,” Farley said.
