PHOENIX — Arizona added just 24,600 jobs throughout 2025, marking the state's weakest employment growth in more than 15 years. The sluggish performance mirrors only two previous recessions and the COVID-19 pandemic in terms of slow job creation.
The annual numbers remained nearly identical to 2024, signaling a cooling labor market after years of explosive post-pandemic growth across the state.
December provided some encouraging news, however. Arizona added 6,400 jobs last month, representing the best monthly gain since April and ranking fifth-highest in the nation. Only Texas, New York, Illinois and Wisconsin added more jobs during the month.
Meanwhile, several states experienced job losses in December, including Indiana, South Carolina, Tennessee, Nebraska and Florida.
Health care leads job creation
Health care dominated Arizona's job growth, accounting for 61% of all new positions created in 2025. Construction, business services, and leisure and hospitality sectors also posted gains throughout the year.
The biggest losses came from government positions, which declined by nearly 10,000 jobs. Trade and manufacturing sectors also experienced significant decreases.
Three industries show explosive growth
Despite the overall sluggish performance, three industries demonstrated remarkable expansion. Arts, entertainment and recreation jobs surged 12%, while mining and logging grew 10%.
Building construction jumped 10% as well, fueled by the ongoing data center boom across the Valley. The technology infrastructure expansion has created substantial demand for construction workers and related services.
State government jobs shrank the most among declining sectors, with federal positions close behind. Civil engineering, administrative support and durable goods manufacturing all saw notable declines throughout 2025.
The question facing Arizona's economy heading into 2026 remains whether the state will experience a rebound or continue the pattern of sluggish growth that defined the past year.
This story was reported on-air by a journalist and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.
