Tucson MSA August 2026 Summary
Employment
The non-seasonally adjusted civilian labor force in the Tucson MSA (Pima County) declined over the year from February to June, following a modest increase in January. Demographic forces, including retirement of the baby boomer generation and low net migration, are likely behind this trend and are expected to continue putting downward pressure on the labor force. In the first half of 2026, the labor force declined to 480,847 in June (-3.7% over the year) from 500,994 (+0.5% over the year) in January.
The non-seasonally adjusted unemployment rate for Tucson MSA rose 1.1 percentage points over the year in June to 5.7%. The abrupt jump from 4.7% in May to 5.7% in June reflected the seasonality of the labor market, as well as high volatility due to the small sample size of the Local Area Unemployment Statistics survey. Phoenix MSA and the state unemployment rates showed an increase in recent months as well.
Seasonally adjusted nonfarm payroll employment in the Tucson MSA was generally higher over the year in the second quarter of 2026. Employment was up 0.2% in both April and June, and it changed little in May. It increased to 406,100 in June from 402,800 in January. Non-seasonally adjusted nonfarm employment showed year-over-year losses in the first five months of 2026, with smaller declines in April (-0.0%) and May (-0.1%) before finally turning positive in June (+0.2%).
On a non-seasonally adjusted basis, most significant payroll job gains over the year in June were in Professional and Business Services, Private Education and Health Services, and Other Services sectors. Those gains were dragged the most by Leisure and Hospitality, Financial Activities, Manufacturing, and Trade, Transportation, and Utilities.
Spending
Retail sales excluding food and gasoline in the Tucson MSA rose 0.8% over the year in May, reaching $1.09 billion. Restaurant and bar sales continued the strong trend, rising 7.9% in May to $261.3 million. Gasoline sales hovered around 30% higher over the year from March to June, due to higher gas prices related to conflicts in the Strait of Hormuz. Amusements sales plunged in May (-23.9%), returning the surge in January (+26.6%). Hotel and Motel sales increased 7.5% over the year in May after posting two declines in prior months.
Housing
Building permits in the Tucson MSA were soft in the first half of 2026. In June, total permits rebounded over the year in June, up 17.2% (437 units) following a 21.4% decline in May (319 units) and a 3.9% (427 units) increase in April. Single-family permits followed a similar pattern, rising 17.1% in June (377 units) following a 21.9% decline in May (275 units) and a 13.8% increase in April (387 units).
According to the Tucson Association of Realtors, total units sold increased over the year in the second quarter of 2026, while the median home sale price slightly declined. In July, units sold slid 2.0% to 1,188, and median home sale price changed little from last year at $364,900.
Exhibit 1 presents current Tucson MSA economic indicators.