(The Center Square) – Arizona’s economy has been experiencing slow but positive growth, according to Zachary Milne, a senior economist at Common Sense Institute Arizona.
CSI released a report last week detailing the state’s economic outlook for September.
The nonpartisan research organization’s report said Arizona’s unemployment rate increased from 4.1% to 4.2%, tying it for America’s 34th-lowest rate with New York. The No. 1 lowest rate in the nation is in South Dakota. At the bottom of the list with the worst jobless rates are California at No. 50 and Washington, D.C., as No. 51.
From August to September, Arizona added only 2,200 jobs, which ranked 21st nationally, the report stated.
Just like in Arizona, employment growth nationwide has slowed, Milne told The Center Square. The economist described America’s economy as “uneasy.”
The sectors that saw the most significant job growth in Arizona were professional and business services, which added 2,000 jobs from August to September.
Arizona’s manufacturing sector lost 200 jobs in September, the report stated.
The report found Arizona has gained 32,600 jobs, representing 1.01% year-over-year economic growth. This ranked higher than the national average of 0.83%.
Arizona’s “economic footing” is in “the middle of the pack” in America, Milne said.
Arizona’s economic growth is “underperforming” compared to where it was a couple of years ago, the economist stated. Furthermore, the state’s economic growth is not as high as it was before the COVID-19 pandemic, he added.
Over the next couple of months, Arizona will see the same type of economic growth, Milne said.
From September 2024 to September 2025, the industries that saw the biggest economic growth were mining and logging and education and health services. The mining and logging industry grew 8.8% year over year, while the education and health services grew 4.1% during the same time period.
The education and health services sector accounts for a large share of Arizona’s economy, representing around 17% of the state’s non-farm employment, Milne noted.
Arizona’s biggest sector is the trade, transportation and utility, which accounts for around 19% of its non-farm employment, he said. This industry saw a 0.1% decrease in employment gain year over year.
In 2025, the report showed that the Tucson Metro area experienced the biggest economic growth of any metro area in Arizona, with a 0.5% increase. This ranks 0.1% in front of Phoenix’s metro area.
Regarding wages, Arizona private-sector workers earn an average of $35.17 an hour, up from $33.96 a year ago, the report noted.
Job numbers since the pandemic have undergone extensive revisions after release.
This trend will continue, Milne said, but added September’s revisions “were not very large.”
While many states have seen downward revisions in their corrections job numbers, Milne pointed out Arizona has seen positive revisions.
