Arizona economy strong despite national turmoil as experts remain sceptical on 'mass deportations'

Phoenix, Arizona: The prospect of a new presidential administration has spurred discussions among economists about potential changes in economic policy and their implications for Arizona.

Key concerns include tariffs, immigration policies, tax cuts, and renewable energy credits. However, Arizona, particularly Phoenix, is emerging as a standout in the national economy, ranking among the top 10 US labor markets for 2024.

Dennis L Hoffman, director of Arizona State University’s Office of the University Economist, expressed cautious optimism during the ASU/PNC Bank Economic Forecast Luncheon in Phoenix. “Let’s hope this is a new chapter for Arizona, like the Diamondbacks in the World Series,” Hoffman remarked, drawing an analogy to the state's resilience and potential for success. The event, sponsored by ASU’s W.P. Carey School of Business and PNC Bank, attracted business leaders and economists who examined the state’s economic trajectory.

Hoffman highlighted Arizona's impressive metrics: a 9th-place ranking in job creation, a near-record low unemployment rate of 3.5%, and robust wage growth across sectors such as private education, health services, and construction. Five key industries — health services, wholesale trade, construction, education, and professional/tech — accounted for 90% of the state’s job growth in 2024. Though federal policies have tempered job growth, Arizona still added 68,800 jobs in 2024, with a slight decline projected for 2025 due to inflationary pressures.

Arizona's housing market remains resilient despite rising interest rates, with sales cooling but prices holding steady. Hoffman noted that real estate professionals may face challenges due to reduced sales volume but emphasized the state’s overall economic strength. “Our unemployment is low, population growth is robust, and demand across sectors remains high,” he said.

On a national scale, Hoffman addressed potential impacts of president-elect Donald Trump’s policies, including tariffs, immigration reform, and tax cuts. He expressed skepticism about large-scale deportation efforts, emphasizing the critical role immigrants play in Arizona’s workforce, particularly in industries like hospitality, construction, and health services.

Hoffman concluded his presentation with an optimistic outlook for Arizona. “This is a strong position for the state,” he said, citing its ranking as the sixth-best metro labor market in the nation. With a dynamic labor market, strong population growth, and vibrant industries, Arizona remains poised for continued economic success.