Cooling, not cracking: That’s the state of the United States economy in late 2025 as we head into the new year.
The U.S. Consumer Price Index for all urban consumers (all items) rose 2.7% over the year in November and 0.2% over the September to November period. The U.S. Bureau of Labor Statistics did not collect survey data for October due to the lapse in appropriations. Thus, there will be no October reading for the Phoenix MSA. The all items less food and energy index rose 2.6% over the year in November. The energy index was up 4.2%, and the food index was up 2.6%. The shelter index, which reflects rent, imputed owner-occupied rent, short-term rentals, and other costs (such as renters’ insurance), was up 3.0%. – George Hammond
READ MORE: Here’s why the Arizona economy is poised to accelerate
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The U.S. added just 64,000 net jobs (seasonally adjusted) in November, according to the latest release from the U.S. Bureau of Labor Statistics. That translated into over-the-year growth of 0.5%. Overall, the U.S. has generated little job growth since April. Health care continues to be the major driver of job gains. The U.S. seasonally-adjusted unemployment rate was 4.6% in November, up from 4.1% in June. – George Hammond
The number of U.S. job openings for October was unchanged over the month at 7.7 million on a seasonally adjusted basis. The U.S. Job Openings and Labor Turnover Survey (JOLTS) release for October reported that both hires and total separations changed little over the month. They both stood at 5.1 million and at a rate of 3.2% for the month. Hires were little changed across industries, though the number of total separations dipped in health care and social assistance (-111,000) and federal government (-34,000). Within separations, the number of quits was little changed at 2.9 million, as was the number of layoffs and discharges, which registered at 1.9 million. Layoffs and discharges increased over the month in accommodation and food services (+130,000) and in state and local government, excluding education (+23,000). Note that September estimates were based on partial data that businesses self-reported electronically during the government shutdown and data collected in November following the shutdown. October data were collected, in November following the shutdown as originally planned. – Valorie Rice
The U.S. Employment Cost Index for private sector employees rose 3.5% over the year in September 2025, outpacing the gain in the Phoenix MSA of 3.1%. The national rate was steady in September, compared to June, while the Phoenix index decelerated from 3.3% in June. Compensation reflects wages and salaries, as well as fringe benefits. The index is adjusted for shifts in employment across industries and occupations. Among the major metropolitan areas covered by the data, Miami posted the fastest increase at 5.7% in September, while Detroit reported the slowest gain, at 2.1%. – George Hammond
The U.S. trade deficit continued to decrease in September, down to $52.8 billion from a revised August figure of $59.3 billion. This was the lowest goods and services deficit since June 2020. Exports increased by $8.4 billion to $289.3 billion in September, while imports rose by $1.9 billion to $341.1 billion. Year-to-date, the deficit was 17.2% higher than the same period in 2024. By country, September trade recorded surpluses, in billions of dollars, with Switzerland ($6.6), Netherlands ($5.9), South and Central America ($5.0), and Hong Kong ($2.1). Deficits in billions of dollars were reported with Ireland ($18.2), Mexico ($17.8), European Union ($17.8), Vietnam ($14.4), and China ($11.4). – Valorie Rice
In September, month-over-month state unemployment rates were higher in 8 states, lower in 2 states, and stable in the remaining 40 and the District of Columbia. Arizona’s seasonally adjusted unemployment rate increased by 0.1 percentage points over the month to 4.2%. South Dakota had the lowest unemployment rate in September at 2.0%, while the District of Columbia reported the highest rate at 6.2%. 18 states and the District of Columbia saw unemployment rate increases over the year; Oregon posted the largest gain (+1.0 percentage points). Nine states saw year-over-year unemployment rate decreases; Indiana reported the most significant decline (-0.7 percentage points). – Delaney O’Kray-Murphy
Total nonfarm employment in Arizona increased by 37,200 jobs year over year in September, with the seasonally adjusted unemployment rate rising by 0.1 percentage points to 4.2%. The U.S. seasonally adjusted unemployment rate similarly increased 0.1 percentage points to 4.4% in September. Arizona non-seasonally adjusted total nonfarm employment increased by 24,200. Employment gains were reported in Government (20,900), Private Educational Services (5,900), Professional & Business Services (3,200), Manufacturing (100), and Trade, Transportation & Utilities (100). Employment losses were reported in Health Care and Social Assistance (-2,300), Construction (-1,800), Leisure & Hospitality (-700), Information (-600), Financial Activities (-300), Natural Resources & Mining (-200), and Other Services (-100). – Delaney O’Kray-Murphy
In September, year-over-year metropolitan unemployment rates were higher in 275 of the 387 metropolitan areas, lower in 83, and unchanged in the remaining 29. The September unemployment rates for the Tucson and Phoenix metropolitan areas came in at 4.7% and 4.1%, respectively. Yuma had the highest unemployment rate in Arizona at 16.0%, while Phoenix had the lowest. Sioux Falls, SD, had the lowest unemployment rate in the nation at 1.8%, while El Centro, CA, had the highest rate of 21.5%. The largest year-over-year unemployment rate increase occurred in Brownsville-Harlingen, TX (+2.2 percentage points). Kahului-Wailuku, HI, and Kokomo, IN, had the largest over-the-year rate decreases (-1.5 percentage points). – Delaney O’Kray-Murphy
