The Arizona economy posted surprisingly slow growth in 2024 and is on course for similar performance in 2025. State job growth was revised down significantly last year, matching the national pace. Even so, the state labor market remained tight, with relatively low unemployment and low labor market churn. Month-over-month job growth so far this year has been solid, but unspectacular. With slow growth in employment compensation, overall income growth slowed last year, as did gains in taxable sales. Housing affordability remains a challenge, both nationally and across Arizona. Housing permit activity started the year very slowly, but did pick up some momentum in the latest data.

The outlook for the nation and Arizona remains clouded by economic policy uncertainty. The federal administration

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