Tucson MSA May 2026 Summary
Tucson's job market slipped further into decline in early 2026, with rising unemployment and a cooling housing market.
Exhibit 1 presents current Tucson MSA economic indicators.
In February, the non-seasonally adjusted civilian labor force in the Tucson MSA (Pima County) decreased 1.2% year-over-year to 491,716, breaking an upward trend. The past few months have shown slight increases, with the December civilian labor force rising 1.7% to 502,936 and the January labor force growing 0.5% to 500,994.
In the Tucson MSA, the non-seasonally adjusted unemployment rate rose 0.9 percentage points year over year in February to 4.9%. Earlier months showed similar trends, with the rate increasing 0.7 percentage points in December to 4.1% and 1.2 percentage points in January to 5.1%. Statewide, the non-seasonally adjusted unemployment rate was 4.8% in January and 4.7% in February, 0.8 and 0.7 percentage points, respectively, above the same period one year ago.
Seasonally adjusted nonfarm employment in the Tucson MSA fell in January before showing slight gains in both February and March. Employment declined by 200 over the month in January to 402,800, before rising by 0.4% in February to 404,300 and by less than 0.1% in March to 404,400.
Non-seasonally adjusted nonfarm employment in the Tucson MSA showed year-over-year losses in the first three months of 2026. On a year-over-year basis, each month in the first quarter fell by 0.8%, dropping to 403,000 in January, 406,600 in February, and 406,100 in March.
Among industry-level data, the most significant gain over the year in March occurred in Mining and Logging, which rose 7.4% year-over-year to 2,900. Other Services followed with an increase of 4.8%, reaching 15,200 jobs. Other notable gains occurred in Professional and Business Services (2.3%) and Private Education and Health Services (1.6%).
On the other hand, the largest year-over-year decline in the Tucson MSA was in Construction, with employment falling 3.8% to 20,300. Additional losses occurred in Leisure and Hospitality (-3.0%), Financial Activities (-2.6%), Government (-2.6%), Information (-2.0%), Trade, Transportation, and Utilities (-1.6%), and Manufacturing (-1.0%).
Retail sales excluding food and gasoline in the Tucson MSA rose 1.5% year over year in February, reaching $1.0 billion. Restaurant and bar sales observed more significant growth, rising 4.6% over the year in February to $255.0 million. Gasoline sales increased by 22.0% in March to $144.5 million. Amusements saw the most significant year-over-year gain of 19.7% to $13.3 million, while Hotel and Motel sales observed smaller gains of 2.4% to $78.0 million.
Building permits in the Tucson MSA have declined on a year-over-year basis in recent months for both total and single-family units. Total Permits fell 5.9% in February to 396 and 17.6% in March to 364. Single-family permits followed a similar pattern, dropping 9.8% in February to 351 and 21.3% in March to 299.
The Tucson MSA’s housing market has shown signs of strain in recent months. Units sold declined on a year-over-year basis in the first three months of 2026, while the median home sale price declined in both January and February, then showed no change. Units sold fell 4.2% to 911 in January, 2.6% to 1,122 in February, and 3.1% to 1,348 in March. Median home sale prices fell 2.7% to $355,000 in January, 1.4% to $365,000 in February, and 0.0% to $365,000 in March.