CATALINA FOOTHILLS, Ariz. (KGUN) — As global economic uncertainty deepens, local experts say Tucson is feeling the impact—and may continue to for some time.
At the annual Breakfast with the Economists event held Tuesday morning at the Westin La Paloma, leaders in economic research warned of sluggish short-term growth, fueled by unstable tariff policies and lingering post-pandemic headwinds.
The event featured George Hammond, Director of the University of Arizona’s Economic and Business Research Center, and Anthony Chan, former Chief Economist for JPMorgan Chase.
Together, they offered an outlook on the local, national, and international economies in light of recent developments, including a downgraded U.S. growth forecast from the Organization for Economic Cooperation and Development (OECD).
“Tucson’s overall economic growth was pretty slow last year,” said Hammond. “We actually lost jobs on net.”
Hammond said Tucson shed roughly 2,000 jobs in 2024, with the heaviest losses in professional and business services—a category that includes a wide range of occupations from engineers and consultants to call center workers and janitorial staff.
Despite the job losses, Tucson’s unemployment rate remained stable, a sign that the labor market is tight, if fragile.
The slowdown, Hammond explained, is due to a confluence of factors. The expiration of federal pandemic-era stimulus, rising interest rates, an aging workforce, and, most notably, policy instability surrounding international tariffs have all combined to cloud the economic horizon.
“What’s slowing growth this year is the policy uncertainty—will there or won’t there be tariffs, and what the tariff rates will be,” said Hammond. “That contributes to slower growth because consumers and businesses hold back on major purchases when they’re unsure.”
Chan echoed those concerns, calling the current trade policy environment one of the most volatile in decades.
“Tariff policy is not just changing every quarter, but sometimes every month and sometimes almost daily,” he said. “The global trade uncertainty is now at the highest level since the International Monetary Fund began compiling statistics.”
Chan noted that many business leaders are postponing investments due to this instability. “As soon as we have certainty, even at higher tariff levels, that will be enough for corporate CEOs to feel comfortable.”
In addition to job losses, Hammond highlighted housing as another pressure point. He said affordability remains a major challenge, with Tucson residents spending an average of 45.3% of their income on housing, well above the 30% threshold recommended by economists.
While Tucson’s housing burden is less severe than cities like Austin or San Diego, it still poses risks to growth and quality of life.
“House price growth far exceeded income growth coming out of the pandemic,” Hammond said. “We are still seeing those housing cost burdens really elevated.”
Despite the bleak short-term outlook, both economists see brighter days ahead for the region.
Hammond pointed to manufacturing and healthcare as Tucson’s most promising sectors moving forward.
He noted that manufacturing, in particular, has been performing better in Tucson than in other parts of Arizona, and that these jobs tend to pay above-average wages.
“Once we get into 2026 and 2027, Tucson will get back on a positive growth path,” he said. “We’ll see additional jobs, population, and income going forward.”
For now, however, Tucson, like much of the nation, remains at the mercy of macroeconomic forces beyond its control.
“As soon as we have certainty, even at higher tariff levels, that will be enough for corporate CEOs to feel comfortable,” Chan said.
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