The Monday Morning Quarterback; A quick analysis of important economic data released over the last week .
As the election approaches more attention is going to be placed on the national employment situation. Both sides have argued different points. On the one hand, yes, jobs are being added whereas a few years back we were realizing significant losses. However, the job gains of late have not been all that impressive, certainly not enough to carry us out of these economic doldrums. In addition, yes, the unemployment rate is just under 8% (a political threshold). However, if one includes those individuals that have given up looking for work, or that are underemployed, the rate jumps to about 15%. The numbers are what they are. But, politics does indeed affect the interpretation.
This past week’s data releases continue the same story, slow and unimpressive rates of growth for the U.S. with varying degrees of economic growth state by state. The advanced estimate of U.S. Real GDP reported an increase at an annual rate of 2.0% in the third quarter. New orders for manufactured durable goods increased 9.9% over the previous month, or a 2.5% increase from one year ago. New home sales nationally for September came in at a seasonally adjusted annual rate of 389,000 homes, a 5.7% increase above the revised August estimate. This is a 27.1% gain over September 2011.
U.S. unemployment insurance claims decreased again to a seasonally adjusted estimate of 369,000 claims, a decline of 23,000 claims. The four-week moving average increased slightly by 1,500 claims. Regarding employment, the situation in Arizona and Greater Phoenix is much different than for the nation as a whole. Across the state, employment growth for the year thus far has reached 2.0%. But, this past month the employment base grew at 2.4%. The data for Greater Phoenix showed similar results. Year-to-date employment growth in the Phoenix Metro area reached 2.4%, with the past month displaying 2.8%. Through September of this year, Arizona realized 6.3% growth in Construction, 3.2% in Leisure and Hospitality, and 2.9% in Education and Health Services, to name the top three. Greater Phoenix realized the same pattern with numbers of similar scale. The unemployment rate statewide stands at 8.0%.
Arizona is on pace to be a top 5 state for employment growth by the end of this year and next. But, if the growth in the housing market cools, we will realize some slowing in employment. The degree, though, is uncertain. Moderate housing market activity for the remainder of this year and into next won’t likely result in a major change in the statistics. With how far values declined and the expectations of normal construction activity, Arizona and the Greater Phoenix area can certainly handle the recent additional activity and housing price appreciation.
