by Ethan Faverino | Oct 22, 2025 | Economy, News
By Ethan Faverino |
The U.S. Treasury and the Joint Economic Committee released the Monthly Fiscal Update last week, highlighting a 2.8% reduction in the federal deficit for Fiscal Year 2025 (FY2025), totaling $1.776 trillion compared to $1.828 trillion in FY2024.
The decrease was driven by record-setting tariff collections, increased tax receipts, and modifications to the student loan program approved in the 2025 reconciliation act.
September 2025 concluded with a notable surplus of $197.950 billion, reflecting strong fiscal performance with net outlays of $345.713 billion and net receipts of $543.663 billion for the month.
In FY2025, total federal net outlays reached $7.010 trillion, a 3.91% increase from $6.746 trillion in FY2024. Net receipts rose to $5.235 trillion, up 6.42% from $4.919 trillion in the prior fiscal year.
Despite the robust revenue growth, 25.33% of FY2025 outlays were not covered by revenues, resulting in the federal government spending $1.34 for every dollar received. The Congressional Budget Office (CBO) projects continued growth in outlays and receipts, forecasting net outlays of $7.294 trillion in FY2026, $7.622 trillion in FY2027, and $8.019 trillion in FY2028, with deficits projected at $1.713 trillion, $1.687 trillion, $1.911 trillion, respectively, over the same period.
Outlays by Category
Social Security remained the largest federal expenditure in FY2025, totaling $1.581 trillion (22.5%), followed by Income Security and Veterans Benefits at $1.079 trillion (15.4%), Medicare at $996.72 billion (14.2%), and Net Interest at $970.66 billion (13.8%).
Defense spending accounted for $868.41 billion (12.4%), while Medicaid outlays were $668.14 billion (9.5%). Foreign Aid and other outlays represented smaller shares, at $32.21 billion (0.5%) and $814.75 billion (11.6%), respectively.
Receipts by Category
Individual Income Taxes were the largest revenue source in FY2025, contributing $2.656 trillion (50.7%), followed by Social Insurance and Retirement Taxes at $1.748 trillion (33.4%).
Corporation Income Taxes added $452.09 billion (8.6%), while Customs Duties, boosted by record setting tariff collections, reached $194.87 billion (3.7%). Other receipts totaled $183.31 billion (3.5%).
Despite the deficit reduction, net interest payments on the national debt hit a record high of nearly $971 billion in FY2025, a $100 billion increase from FY2024. The Committee for a Responsible Budget projects that by 2051, interest payments will become the largest federal expense, surpassing Social Security.
Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.
by Jonathan Eberle | Oct 19, 2025 | Economy, News
By Jonathan Eberle |
A new study shows that Arizonans are among the hardest-working Americans, with the state ranking third in the nation for longest average working hours.
The research, conducted by global executive search firm Keller, analyzed Bureau of Labor Statistics data from 2022 through 2024 to determine where U.S. workers are putting in the most time on the job. Across that three-year period, Arizona’s workforce averaged 116.43 annual hours worked, placing it just behind two other top-ranking states.
Breaking it down year by year, Arizonans logged 113.39 hours in 2022, 116.87 hours in 2023, and 119.01 hours in 2024, showing a steady upward trend in the state’s overall workload. A spokesperson for Keller noted that Arizona’s rapid population growth and expanding industries are key drivers behind the long hours.
“Arizona’s booming construction and healthcare industries, along with rapid population growth, have created sustained demand for longer workweeks,” the spokesperson said. “The Grand Canyon State’s workforce is balancing expansion in both service and industrial sectors.”
The findings underscore Arizona’s continued economic momentum, as the state has seen significant growth in sectors such as healthcare, logistics, and advanced manufacturing. Keller’s study highlights how workforce trends vary widely across the U.S., with some states showing shorter workweeks even as national labor participation remains steady.
The firm, which specializes in global recruitment and executive placement, said the results reflect broader economic and demographic shifts shaping local job markets.
Jonathan Eberle is a reporter for AZ Free News. You can send him news tips using this link.
by Ethan Faverino | Oct 16, 2025 | Economy, News
By Ethan Faverino |
The National Federation of Independent Business (NFIB) Small Business Optimism Index dropped 2 points in September to a score of 98.8, marking the first decline in three months.
Despite remaining above the 52-year average of 98, the dip reflects growing concerns among small business owners grappling with inflationary pressures, supply chain disruptions, and persistent labor shortages. The Uncertainty Index climbed 7 points to 100, making it the fourth-highest reading in over 51 years.
NFIB Chief Economist Bill Dunkelberg said, “Optimism among small business owners decreased in September. While most owners evaluate their own business as currently healthy, they are having to manage rising inflationary pressures, slower sales expectations, and ongoing labor market challenges. Although uncertainty is high, small business owners remain resilient as they seek to better understand how policy changes will impact their operations.”
In Arizona, small business owners echoed with national concerns: “Unfortunately, Arizona small business owners are facing the same sort of challenges we see in the national survey,” NFIB State Director Chad Heinrich said. “The ongoing labor shortage and inflationary pressures are giving small business owners pause in this economy. They’re focused on meeting their customers’ needs and retaining their workforce.”
Key findings from the September survey include:
- Inflation and Supply Chains: Inflation emerged as a significant issue, with 14% of owners citing it as their top business problem, up 3 points from August. A net 24% raised selling prices, up 3 points, and a net 31% plan to increase prices in the next three months, up 5 points. Supply chain disruptions impacted 64% of owners, a 10-point jump from August.
- Labor Market Struggles: 32% of owners reported unfilled job openings, unchanged from August. Of the 58% that are hiring or trying to hire, 88% faced a shortage of qualified applicants. A net 16% plan to create jobs in the next three months (up 1 point) is the highest since January 2025. Labor quality is tied with taxes as the top concern, cited by 18% of owners.
- Inventory and Sales: A net negative 7% viewed current inventory as “too low,” down 7 points—the largest monthly decline in the survey’s history. A net negative 7% reported higher nominal sales over the past three months, up 2 points, but a net 8% expect higher real sales volumes (down 4 points).
- Earnings and Investments: Actual earnings improved, with a net negative 16% reporting profit trends, up 3 points, and the highest since December 2021. Among those with lower profits, 33% cited weaker sales and 17% pointed toward material costs. Capital outlays remained steady, with 56% of owners reporting expenditures, primarily on equipment and vehicles.
- Financing Challenges: A net 7% reported tougher loan conditions, up 4 points and the highest this year. The average rate on short-maturity loans rose 8.8%. Regular borrowing increased, with 26% of owners reporting loans, up 3 points.
Despite these challenges, 57% of owners rated their business health as “good,” up 3 points, while 11% said “excellent,” down 3 points.
Taxes and labor quality tied as the top concerns, each cited by 18% of owners, while poor sales (10%) and government regulations (6%) remained notable issues.
Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.
by Ethan Faverino | Oct 13, 2025 | Economy, News
By Ethan Faverino |
In a landmark victory for small businesses, Congress has made the 20% Small Business Tax Deduction, also known as Section 199A, a permanent qualified business deduction, ensuring long-term tax certainty for Main Street.
This critical provision allows small businesses to deduct up to 20% of their income, empowering mom-and-pop shops to grow, invest in their workforce, and play their part in giving back to the community.
The decision, signed into law by President Trump, averts a massive tax hike that would have impacted over 33 million small business owners nationwide at the end of 2025.
Making the Small Business Tax Deduction permanent changes the game for Main Street. The tax certainty provided by Congress ensures small businesses can thrive, hire more workers, and compete with larger corporations.
Since its introduction in 2017, the deduction has leveled the playing field for nine out of ten small businesses that file as pass-through entities. Recent NFIB surveys show growing confidence, with small business optimism reaching a five-month high.
The new tax law also includes pro-small business provisions, such as permanent extensions of the 2017 marginal tax rates, preventing up to a 4% tax hike for small businesses and employees.
Enhanced expense and depreciation rules under Section 179 and 168(k) enable business owners to confidently invest in growth, such as making large purchases. Additionally, increased reporting thresholds for IRS forms 1099-K, 1099-NEC, and 1099-MISC reduce paperwork burdens for businesses using platforms like Venmo or PayPal or engaging independent contractors.
The permanent estate tax exemption further supports owners looking to pass their businesses to the next generation or keep them locally owned.
National Federation of Independent Business (NFIB) State Director Chad Heinrich said, “An NFIB-commissioned study by EY found that the Small Business Tax Deduction will increase Arizona’s economic activity by more than $1.4 billion annually, resulting in the creation of 26,000 jobs each year. That means more, good-paying jobs for hardworking Arizonans.”
Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.
by Staff Reporter | Sep 29, 2025 | Economy, News
By Staff Reporter |
A series of new laws taking effect are anticipated to raise Arizona’s economic competitiveness.
The Arizona Chamber of Commerce & Industry (Arizona Chamber) highlighted six new laws as giving the state a beneficial boost in economic performance against other states.
These laws aim to make it feasible for international headquarters to build on-site workforce housing and support services (Senate Bill 1543), permit utilities to refinance infrastructure investments through securitization (House Bill 2679), allow Chase Field renovations without increasing taxes (House Bill 2704), make it feasible for advanced air mobility systems such as drone deliveries and air taxis (Senate Bill 1307), require utilities and public power entities to implement wildfire mitigation plans (House Bill 2201), and bars foreign entities from funding lawsuits while limiting outside funding to third-party litigation (Senate Bill 1215).
Dozens of states are working together to create a uniform approach to allowing advanced air mobility, along with the Federal Aviation Administration. Over 30 states are members of the Advanced Air Mobility Multistate Collaborative (AAMMC), formed in 2023 with eight to 10 member states. Arizona is member to the organization leading AAMMC, the National Association of State Aviation Officials.
In addition to raising awareness of the new laws it backs, the Arizona Chamber also releases public reports of failed bills it believed would harm the state’s economy. The chamber announced their 2025 report is forthcoming.
Arizona Chamber President and CEO Danny Seiden stated that the six featured laws would retain corporate interest in the state by implementing necessary reforms and new pathways to growth.
“As these laws take effect, Arizona employers can count on policies that reflect their priorities,” said Seiden. “From keeping vital economic drivers in Arizona, to passing commonsense energy reforms that will deliver long-term stability and affordability, to supporting global companies, these are the kinds of policies that keep Arizona competitive and attractive for investment.”
The legislature also passed other laws anticipated to boost the economy, some of which Governor Katie Hobbs also approved from the Republican-controlled legislature despite a historic veto record (nearly 200 bills this year, compared to her previous historic record of over 140 in 2023).
One such law promises to further protect Arizona from regulatory capture by monopoly-controlled utilities (House Bill 2518). The legislation prohibits Arizona Corporation Commission (ACC) members from accepting employment with the utilities under their regulation. Not all ACC members were pleased with the legislation, namely ACC Chairman Kevin Thompson.
Chair Thompson was the subject of an ethics claim filed by the Energy Policy Institute earlier this year, as first reported by the Arizona Republic. The institute alleged a conflict of interest regarding the relationship between Thompson’s consulting firm and utilities.
Another law will ensure construction crews may work in the early morning hours in the summers by prohibiting municipalities and counties from enacting or enforcing noise ordinances, rules, or regulations prohibiting general construction activities during certain summertime hours (Senate Bill 1182).
And another law requires municipalities to give affected businesses at least 60 days’ notice before voting on tax increases (House Bill 2119).
The legislature also chose to sunset the Low Income Housing Tax Credit program rather than renew. Critics of the program blame lax policies and procedures for the Department of Housing’s loss of around $2 million to a wire fraud scam in 2023.
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