As Arizona enters 2025, the state's economy is poised for both growth and challenges, influenced by a variety of factors. In October 2024, Arizona experienced a job increase of 65,000, translating to a 2% growth rate, which surpasses the national average of 1.3%, according to the University of Arizona [4157f2bb]. The unemployment rate remains low at 3.6%, with significant job gains particularly in the Phoenix Metropolitan Statistical Area, which added 45,100 jobs [077be34f].
However, the economic landscape is complicated by upcoming policy changes expected under President-elect Donald Trump. Economists warn that proposed tariffs, immigration policies, tax cuts, and reductions in energy credits could significantly impact the state's economy. Jason Miller, a professor at Michigan State University, highlights that mass deportations could lead to labor shortages in critical sectors such as agriculture and construction, which heavily rely on immigrant labor [4157f2bb].
Additionally, a June study by the Peterson Institute for International Economics indicated that deporting undocumented workers could result in prolonged inflation, further straining the economy [4157f2bb]. While the automotive sector remains strong, vehicle sales have not yet returned to pre-pandemic levels, with consumers increasingly favoring more expensive trucks and SUVs. On a positive note, decreasing interest rates may stimulate sales in this sector [4157f2bb].
Despite the challenges, Arizona's median home price has seen a slight increase to $449,900, which continues to affect affordability for many residents. Per capita personal income has risen to $62,543, a 6.1% increase from 2022, yet inflation remains a concern, with current rates at 1.6% in Phoenix [077be34f].
Public sentiment reflects these economic anxieties, as a CBS News and YouGov poll shows that 82% of voters in Arizona are worried about the economy, particularly regarding inflation and the cost of living [ee6f0845]. Looking ahead, forecasts predict job growth of 2.9% in 2024, but the potential for a U.S. recession and significant policy shifts could pose risks to this outlook [17e71f2d].
In summary, while Arizona's economy has shown resilience with a low unemployment rate and job growth, the interplay of rising costs, housing affordability, and external economic pressures will be critical factors to monitor as the state moves into 2025 [aad5521d].