Arizona’s labor market hit the brakes in 2025, adding only 24,600 jobs statewide, the weakest annual gain in more than 15 years. That slowdown left a handful of standout sectors, especially health care and certain construction projects, doing most of the heavy lifting while manufacturing, trade, and public payrolls sagged.
According to ABC15, the state’s net increase for the year came to 24,600 jobs, and a December rebound added about 6,400 positions, Arizona’s best monthly gain since April. ABC15 reports that the annual tally was nearly identical to 2024, a clear signal that the post-pandemic hiring surge has cooled off.
Federal data show that the December bump left Arizona among the country’s top performers for the month, with only Texas, New York, Illinois, and Wisconsin adding more payrolls, according to the Bureau of Labor Statistics. The BLS release also noted that while some states booked strong month-to-month gains, annual job totals remain uneven across the map.
Sectors That Carried the Weight
Health care supplied roughly 61% of all new positions in 2025, according to ABC15, making it the undisputed engine of job creation. Building construction climbed about 10% as the Valley’s data center buildout ramped up demand for labor and materials, while business services and leisure and hospitality chipped in more modest gains. On the losing side, government payrolls shrank the most, with state government employment dropping by nearly 10,000 jobs, and trade, durable-goods manufacturing, and administrative support all seeing notable declines.
Data Centers Driving Construction, Not Broad Hiring
The scale of the data center buildout is reshaping industrial and utility patterns across metro Phoenix, and Axios Phoenix has detailed the energy and water pressures tied to those projects. Analysts say these facilities can supercharge construction employment in the short term without delivering a comparable wave of long-term payrolls in local services or manufacturing…