Unemployment Fell In 17 States In September, But Not Arizona

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October 25, 2026

By Staff Reporter |

The latest federal unemployment report reveals that unemployment fell in 17 states — but not Arizona.

The Joint Economic Committee’s (JEC) monthly State Employment Update reported that unemployment fell in 17 states and D.C., rose in nine states, and remained unchanged in 24 states.

Nationally, nonfarm payroll jobs, the unemployment rate, and the labor force participation rate all increased from August to September.

Arizona was one of the 24 states to experience an unchanged unemployment rate at 4.9%. In August, JEC reported that Arizona lost 5,500 net payroll jobs, compared to 300 last month.

The national unemployment rate is 4.2%.

Over the past 12 months, the state added nearly 19,000 net payroll jobs and the unemployment rate rose by 0.5% from 4.4%.

Additionally, Arizona’s nonfarm payroll employment has increased in eight of the past 12 months. The state ranks 21st in the nation for percentage gain in nonfarm payroll employment over the past 12 months.

The state also lost 2,800 private sector jobs in September, and 4,500 private sector jobs in August.

Last month, employment fell by nearly 7,600; over the past 12 months, employment has fallen by nearly 133,000.

The state’s labor force participation rate also fell, from 59.9% to 59.7% last month, marking a 10-year low for the state. In the past 12 months, the participation rate has fallen by 2.4%. With these rates, Arizona ranks 37th in the nation for labor force participation.

Arizona experienced a 10-year high for its labor force participation rate in November 2019, at 62.2%.

From August to September, the best performing sectors for employment were state and local government, an addition of 2,600 jobs, followed by other services, an addition of 600 jobs. The worst performing sectors were professional and business services, a loss of 1,600 jobs, and private education and health services, a loss of 1,300 jobs.

From September 2025 to September 2026, the best performing sectors for employment were private education and health services, an addition of 14,700 jobs, and professional and business services, an addition of 7,800 jobs. The worst performing sectors were leisure and hospitality, a loss of 8,800 jobs, and financial activities, a loss of 6,700 jobs.

Creeping and stagnant unemployment struggles have exacerbated worsening affordability issues, felt this year more than ever. Affordability is a key issue for both Republicans and Democrats in the upcoming midterm elections; both parties have blamed the other for the growing lack of affordability that has hit Arizona especially hard.

Data analysis over the summer reported that Arizona is among the worst affected by the affordability crisis. More Arizona households have reported carrying above-average debt, and falling behind on payments at rates above the national average.

Arizona sits in the bottom half of the nation for average credit score, 666, and experienced the 10th-fastest drop in average household credit score among all states in 2025.

Auto loan debt was reported at 7% higher, credit card debt is 8% higher, and mortgage debt is 22% higher than the national average.