Economic Headwinds in Early 2026
Current data as of 14 May 2026
The U.S. unemployment rate changed little at 4.3% in April, while total nonfarm payroll employment edged up by 115,000, according to the Bureau of Labor Statistics’ May 8th employment situation summary. The unemployment rates for major worker groups showed little or no change in April, with teenagers (14.4%) having the highest unemployment rate and Asian (3.3%) having the lowest. The number of people who are jobless for fewer than five weeks increased by 358,000 to 2.5 million, while the number of long-term unemployed was essentially unchanged at 1.8 million. Employment rose in Health Care (37,000), Transportation and Warehousing (30,000), Retail Trade (22,000), and Social Assistance (17,000). Employment declined in Federal government (-9,000) and information (-13,000) and showed little change in other major industries. -Delaney O’Kray-Murphy
The U.S. Consumer Price Index for All Items rose 0.6% over the month in April, down from 0.9% in March. The all-items index was up 3.8% over the year. Energy prices accounted for nearly 40% of the monthly increase and were up 3.8% over the month. Excluding food and energy, prices rose 0.4% over the month in April and 2.8% over the year. Overall energy prices were up 17.9% over the year, while food prices were up 3.2%.
The Phoenix MSA Consumer Price Index for All Items increased 3.0% over the year in April, below the national pace of 3.8%. Excluding food and energy, Phoenix prices were up 1.7%. Consumer commodities prices (tangible goods including food and energy) were up 5.7% over the year, while services prices were up 1.8%. Phoenix shelter prices increased 0.8% over the year in April. -George Hammond
The U.S. Producer Price Index for final demand rose 1.4% over the month in April, double the increase in March. That was the fastest increase since March 2022. Over the year, the final demand index was up 6.0%, the fastest pace since December 2022. Nearly 60.0% of the monthly increase in final demand prices was driven by services. In turn, the increase in services was driven by trade services, particularly margins for machinery and equipment wholesaling. Gasoline price increases were also an important factor in the rapid price increase for final demand. The index for processed goods for intermediate demand rose 2.7% over the month, while the index for unprocessed goods rose 4.1%. Again, energy goods (including crude petroleum) were an important factor driving prices for intermediate demand. -George Hammond
The March goods and services trade deficit came in at $60.3 billion, up $2.5 billion from a revised $57.8 billion in February. March exports rose $6.2 billion to $320.9 billion, and imports rose $8.7 billion to $381.2 billion. The increase in the deficit reflects an increase in the goods deficit of $4.1 billion to $88.7 billion and an increase in the services surplus of $1.6 billion to $28.4 billion. Year to date, the goods and services deficit decreased $211.2 billion, or 55.0%, from the same period last year, with exports increasing 12.0% and imports decreasing 9.1%. The largest surpluses, in billions, occurred with the Netherlands ($7.4), the United Kingdom ($6.1), and Hong Kong ($5.8), while the greatest deficits were with Taiwan ($20.6), Vietnam ($19.2), and Mexico ($16.4). -Delaney O’Kray-Murphy
In March, month-over-month state unemployment rates were stable in all 50 states and the District of Columbia. 14 states had jobless rate increases from a year earlier, two had decreases, and 34 states and the District of Columbia were little changed. South Dakota had the lowest jobless rate in March at 2.3%, followed by Hawaii at 2.4%. The District of Columbia had the highest unemployment rate at 6.3%, followed by Delaware at 5.4%. The largest year-over-year unemployment rate increase occurred in Connecticut and Florida (1.1 percentage points), while the most significant decrease occurred in Ohio (-0.7 percentage points) and Indiana (-0.4 percentage points). -Delaney O’Kray-Murphy
Phoenix remains the fifth-largest city in the U.S., based on 2025 city and town population estimates released by the U.S. Census Bureau on May 14. New York, Los Angeles, Chicago, and Houston are the top four most populous cities in the nation. The top five fastest-growing cities in the nation with over 20,000 residents were all in Texas, all with double-digit increases. One Arizona town did make the list, however. Queen Creek ranked 12th fastest growing, with an 8.2% increase. The cities and towns with the largest change in the population numbers found two Arizona cities among the top 15: Surprise at 13th and Goodyear at 15th. Charlotte, NC, had the largest numeric increase, followed by Fort Worth, TX. Population growth was lower overall, with median (0.7%) and large (0.5%) cities showing slightly more growth than small (0.1%) or very large cities (0.3%). This continues the trend from the previous year, when growth ranged from 0.3% in small cities to 1.0% in both median and large cities. -Valorie Rice
In March, year-over-year total building permits in Arizona fell by 17.7% to 4,133, not seasonally adjusted. The number of single-unit permits similarly dropped 8.8% year-over-year to 3,017. The Phoenix Metropolitan area accounted for most of the permits in the state, with 3,263, a 17.2% year-over-year decrease. The number of single-unit permits saw a similar decrease, falling 5.6% to 2,238. The Tucson Metropolitan area similarly saw decreases in both total and single-unit permits, with total permits falling 17.6% to 364 and single-unit permits dropping 21.3% to 299. Of the counties, Navajo, Santa Cruz, Yavapai, and Yuma saw increases, while Apache, Cochise, Coconino, Graham, Maricopa, Mohave, and Pinal saw decreases. No change was observed in La Paz. -Delaney O’Kray-Murphy