Phoenix CRE Faces 52% Slower 2026 U.S. Job Growth as Inflation Holds Above 2%

1 articles · Updated · Arizona Big Media · Aug 18

Marcus & Millichap said Metro Phoenix enters late 2026 on a resilient footing, but a weaker U.S. labor market and stubborn inflation are creating a tougher backdrop for commercial real estate.
U.S. job creation was revised down to 426,000 from 550,000, average monthly hiring has slowed to 61,000, and the firm now projects 750,000 jobs for 2026—52% below the 10-year average.
That slowdown could curb the business expansion and hiring that support Phoenix demand for apartments, offices, retail centers and industrial space after years of population and corporate growth.
Inflation remains another constraint: headline CPI is 3.4% and core inflation 2.5%, leaving markets to expect one more 25-basis-point Fed hike even as employment softens.
Borrowing costs have at least stabilized, with the 10-year Treasury near 4.7%, giving developers and investors more predictability even as geopolitical and policy risks threaten fresh volatility through year-end.