Arizona's job market is forecast to outstrip national averages over the next decade according to a new report from the Arizona Office of Economic Opportunity. With an anticipated growth of over 450,000 jobs, the state is expected to see an annualized growth rate of 1.2%, which would overtake the projected 0.3% growth rate for the country as a whole, according to ABC15.
However, in a contrasting assessment by the Eller College of Management at the University of Arizona, the state's economy displayed a cooling trend with sluggish job gains into 2025. According to their analysis, job growth was unbalanced with sectors such as manufacturing and information experiencing declines. When anchored exclusively by its sails in the healthcare and education sectors, their report indicated the state added 34,300 jobs over the past year, which nevertheless outpaced U.S. growth rates, as reported by The University of Arizona.
The Phoenix metro area is expected to be the hub for the job surge, as Maricopa County boasts the highest rate of annualized job growth. Yet, rising unemployment—from 3.3% in March 2024 to 4.1% currently—and a steep drop in the hires rate from 5.2% in July 2022 to 3.6% in June 2025 suggest a labor market on uncertain terrain. Within the housing sector, the cost of median-priced homes has reached a level where upwards of 47% of median household income is necessary to meet the demand in major cities like Phoenix and Tucson, echoing the Federal Reserve Bank of Atlanta's data on compromised affordability, as detailed by The University of Arizona.
Long-term projections still put Arizona in a favorable light relative to the rest of the nation, with an anticipated 1.0% annual growth rate in population over the next 30 years. Yet, this marks a significant slowdown from the 2.0% annual pace seen from 1994 to 2024. Major factors influencing growth include demographics, the aging baby boomers, and fluctuating net migration. Looking downward on piercing through the demographic fabric of the state, the Eller report anticipates a shift from natural increases in the population to a natural decrease by the mid-2040s, fundamentally altering the dynamics of Arizona's population growth, as outlined by the The University of Arizona.
These forecasts could change depending on things like immigration policies, investment in workers, and resources such as water. If immigration stays tight, Arizona’s population and workforce may grow more slowly, which could hurt the economy. New technologies like AI and automation could help or disrupt jobs. Overall, Arizona’s economic future depends on how well the state manages its policies, investments, and resources.
