Phoenix is maintaining its economic momentum with job and wage gains, according to an analysis from Eller’s Economic and Business Research Center.

In August, the non-seasonally adjusted civilian labor force in the Phoenix-Mesa-Chandler MSA (Phoenix MSA) grew 1.7% year-over-year to 2.8 million, continuing a consistent upward trend. June and July recorded similar year-over-year gains of 1.8% and 1.6%, respectively.

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The Phoenix MSA’s labor market showed solid strength in August, as non-seasonally adjusted resident employment climbed 1.1% year-over-year to 2.6 million. June and July both posted slightly stronger gains of 1.3%. Statewide, Arizona employment grew 1.0% to 3.6 million, with the Phoenix MSA accounting for approximately 72% of the state’s total employment.

With labor force growth outpacing job gains, the Phoenix MSA’s non-seasonally adjusted unemployment rate rose 0.6 percentage points year-over-year to 4.2% in August, a year-to-date high. June and July also saw increases, with the unemployment rate rising 0.5 and 0.3 percentage points year-over-year to 4.0% and 4.1%, respectively. At the state level, the non-seasonally adjusted unemployment rate increased 0.6 percentage points to 4.8%, its highest level since August 2021.

Seasonally adjusted nonfarm employment in the Phoenix MSA rose 0.2% in August, adding approximately 4,300 jobs to reach 2.5 million. Recent months have shown mixed results, with employment declining 0.3% in both May and June before rebounding with 0.2% gains in July and August. Statewide, Arizona added just 700 jobs to reach 3.3 million, with the Phoenix MSA accounting for 75.7% of the state’s total employment.

Non-seasonally adjusted nonfarm employment in the Phoenix MSA rose by 1.5% year-over-year in August, reaching 2.4 million jobs. This rise follows year-over-year gains of 0.3% in June and 1.4% in July. Among major industries, Mining and logging posted the largest year-over-year percentage increase, rising 8.1% to 4,000. Other notable growth also occurred in Other Services (+3.9%), Construction (+2.1%), Financial Activities (+1.9%), Government (+1.0%), and Professional and Business Services (0.6%). On the other hand, the Information sector experienced the steepest decline, falling 2.8% to 38,300. Slight losses were also noted in Trade, Transportation, and Utilities (-0.2%) and Manufacturing (-0.1%).

Non-seasonally adjusted average hourly earnings in the Phoenix MSA continued to rise through 2025, increasing 5.2% year over year in August to $36.60. Growth remained consistent with prior months, as wages were up 6.1% in both June and July. At August’s rate, average full-time annual earnings equate to roughly $76,100.

Retail sales excluding food and gasoline rose 5.4% year over year in August, reaching $6.1 billion. Restaurant and bar taxable sales showed similar strength, increasing 7.3% to $1.3 billion, while amusement sales climbed 5.6% to $130.8 million. In contrast, gasoline (-8.5%) and hotel/motel (-4.8%) sales both declined in August. However, gasoline sales rebounded in September, rising 13.9% over the year to $631.8 million.

In August, non-seasonally adjusted housing permits in the Phoenix MSA declined year over year for both total and single-family units. Total permits dropped 52.4% to 1,863, while single-family permits fell 33.5% to 1,549. Activity was somewhat stronger in July, when total permits rose 7.5% over the year to 3,416; however, single-family permits continued to lag, declining 30.3% to 1,735.

Total home sales in the Phoenix MSA rose 3.2% year over year in August, reaching 5,914 units. Despite the increase in transaction volume, the average sale price edged down 1.8% to $566,000. In total, the value of housing sales climbed 1.3% over the year to $3.3 billion.