Photo Credit: TSMC Arizona
It HAD been nothing but sunshine and roses when it comes to new jobs and incoming businesses in Arizona, and by extension Arizona Governor Katie Hobbs. But new information shows that those good times seem to have ground to a screeching halt, with significant political ramifications attached to that.
New data shows that Arizona has had a dramatic fall from an economic powerhouse to 47th in job creation, presenting a significant political challenge for Hobbs as she navigates her first term. The state that once boasted 96% labor force growth between 2000 and 2019 now finds itself shedding jobs while neighbors like Texas and Florida surge ahead.
For Hobbs, these numbers represent both immediate political vulnerability and long-term governance challenges. With Arizona losing 1,900 net jobs this year while comparable states like Washington and Tennessee created tens of thousands, critics will inevitably question her administration’s economic stewardship. The 4.1% unemployment rate offers some political cover, but the underlying trend tells a concerning story.
The timing couldn’t be worse politically. Federal policy uncertainty around tariffs and interest rates, factors largely beyond state control, are nonetheless likely to be weaponized against Hobbs by Republicans both in the legislature and candidates looking to dethrone her, namely Karrin Taylor-Robson and Andy Biggs. The layoffs at the Arizona Department of Economic Security, attributed to decreased federal funding, highlight the delicate balance between federal partnerships and state autonomy that defines modern governance.
However, Hobbs can point to promising developments that may not yet show in current statistics. The massive $165 billion Taiwan Semiconductor Manufacturing Company investment and a record 487 projects in the Arizona Commerce Authority pipeline suggest economic momentum building beneath surface-level job numbers.
The real test for Hobbs will be whether she can effectively communicate that Arizona’s current struggles reflect broader economic transitions rather than policy failures, and her ability to tie them to national Republican leadership much like how Republicans did with Biden last election. With construction slowing, migration declining, and AI reshaping employment, her administration must demonstrate that Arizona is still positioned for growth, or she will be a one-term governor.