Phoenix employment has softened as unemployment has risen, but wage growth, retail spending and housing sales show economic resilience, according to an analysis from the Economic and Business Research Center (EBRC).

In February, the non-seasonally adjusted civilian labor force in the Phoenix-Mesa-Chandler MSA (Phoenix MSA) fell 1.4% over the year to 2.7 million. January recorded a minor gain of 0.1% to 2.8 million.

Non-seasonally adjusted resident employment in the Phoenix MSA saw declines in both January and February. January employment fell 0.8% to 2.6 million, and February employment fell 2.1% to 2.6 million. Statewide, employment fell 2.4% over the year in February to 3.6 million, with the Phoenix MSA accounting for approximately 72.9% of the state’s total employment.

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The non-seasonally adjusted unemployment rate in the Phoenix MSA showed year-over-year increases in both January and February of this year. In January, the unemployment rate came in at 4.4%, 0.9 percentage points higher than a year prior, while in February, the rate came in at 4.2%, 0.6 percentage points higher than last February. At the state level, the non-seasonally adjusted unemployment rate for January came in 0.8 percentage points higher than last year, at 4.8%. In February, the unemployment rate was 4.7%, a 0.7 percentage point increase, and in March it came in at 4.4%, a 0.5 percentage point increase.

Seasonally adjusted total nonfarm jobs in the Phoenix MSA fell 0.2% in March, losing approximately 4,200 jobs to reach 2.5 million. Other recent months have shown mild gains, with employment rising 0.2% in January and 0.5% in February. Statewide, Arizona lost 19,000 jobs in March, with the Phoenix MSA accounting for 68.6% of the state’s total seasonally adjusted jobs.

Non-seasonally adjusted nonfarm employment in the Phoenix MSA fell by 0.2% year over year in March, reaching 2.5 million jobs. This rise follows a year-over-year gain of 0.2% in February and a 0.3% decline in January. Among major industries, Mining and Logging posted the most significant year-over-year growth, rising 12.8% to 4,400. Other notable growth occurred in Other services (2.7%), Professional and Business Services (0.3%), and Manufacturing (0.1%). On the other hand, the most significant losses occurred in Financial Activities (-3.0%), Construction (-1.4%), Trade, Transportation, and Utilities (-0.8%), Information (-0.7%), and Government (-0.4%)

Non-seasonally adjusted average hourly earnings in the Phoenix MSA continued to rise in the first quarter of 2026, with all three months showing year-over-year growth. Earnings increased 4.6% in January to $37.43, 3.5% in February to $37.34, and 2.9% in March to $37.45. At March’s rate, average full-time earnings equate to roughly $77,896.

Retail sales excluding food and gasoline rose 3.3% year-over-year in March, reaching $7.2 million. Gasoline sales saw the largest increase year-over-year in March, rising 26.2% to $753,800, followed by Hotel/ Motel with a 10.3% gain to $519,300 and Restaurants and Bars with a 0.5% increase to $1.7 million. Amusements experienced a slight 3.1% decline year-over-year in March to $197,700.

In March, non-seasonally adjusted housing permits in the Phoenix MSA declined year-over-year for both total and single-family units. Total permits dropped 16.5% to 3,000, while single-family permits fell 4.7% to 1,930. Activity was somewhat stronger in February, when total permits rose 14.4% to 3,269; however, single-family permits still showed a 0.1% decline to 2,123.

Total home sales in the Phoenix MSA rose 11.5% year over year in August, reaching 7,733 units. Furthermore, the average sale price saw similarly positive changes, rising 2.5% year over year to $648,000. In total, the value of housing sales climbed 14.3% year over year to $5.0 billion.