The Monday Morning Quarterback: A quick analysis of important economic data released over the last week
By Elliott D. Pollack & Co.
Arizona Snapshot:
Continued good news. Employment continues to grow albeit modestly. Greater Phoenix outperforms the rest of the state. Unemployment is below 7% in both of the states metro areas. Both initial and total claims for Arizona unemployment insurance continue to slowly decline. Greater Phoenix new single-family housing permits gain over 70% for the year as a whole. New single-family permits in Greater Tucson were also up, but, at a much more modest rate.
U.S. Snapshot:
Overall, a good week. Initial weekly unemployment insurance claims showed their largest improvement in quite some time. Production and capacity utilization both improved slightly. Retail sales were also modestly better. But, consumer sentiment continued to decline. Prices on both the consumer and producer level were about flat. And construction markets continued to improve.
Arizona
The state continued to show gains in employment in December. The gain was modest on a month over month basis (1,300 jobs). But, compared to a year ago, the state gained 2.1% for the year as a whole. In December, the state had almost 61,000 more jobs than in December 2011. While this is anemic by comparison to previous cycles, it is a much better performance than most states’ experience. All sectors, except for Information and Other Services, were up over a year ago. The unemployment rate inched up to 7.9% in December compared to 7.8% in November but much better than 9.0% a year ago. Initial claims for Arizona unemployment insurance dropped to just over 18,000 as of the week of January 13 and now stand 14.2% lower than a year ago. Nationally, initial claims are down only 8.0% over the last year. Total claims dropped very modestly for that week but, now stand 41.1% lower than a year ago.
Greater Phoenix enjoyed bigger gains on a percentage basis for the month and year. The metro area grew by 2.5% for the year as a whole. As of December 2012, Greater Phoenix had 51,800 more jobs than in December 2011. The unemployment rate was 6.7%. The picture was not as sanguine for Greater Tucson. For the year as a whole, the Tucson area had employment gains of only 0.6%. As of December, there were 5,800 more jobs than a year earlier. The unemployment rate was also 6.9%.
New housing continued to improve. For Greater Phoenix, R. L. Brown reported that 668 new single-family building permits were issued in December. This is a 35.8% increase over December 2011. It brings the 2012 total to 11,615 permits, up 71% from 2011. The data from Tucson was not as impressive. Permits were down to 137 in December compared to a monthly average for 2012 of 170
units. For 2012 as a whole, 2,040 new single-family building permits were issued in Greater Tucson. This is a 42% gain over 2011. One would have to look back to the late 1960’s to find the last time permits were this low.
National
Initial claims for unemployment insurance dropped by 37,000 to 335,000 claims. This is the first improvement in some time. Initial claims are now 8.0% below a year ago. Also positive, although very modestly so, was data related to industrial production (up 0.3% for December over November and up 2.2% from a year ago) and capacity utilization (up to 78.8 compared to 78.7 in November and 78.3 a year ago. Capacity utilization rates of over 80% have historically been associated with increases in business spending for plant. This has a ways to go. Retail sales were also up a little in December. The level of sales was up 0.3% over November and 2.2% over a year earlier. Consumer prices were flat for the month and were up only 1.7% from a year ago. Producer prices were down 0.2% on a month over month basis and now stand only 1.3% above year earlier levels. On the other hand, the University of Michigan consumer sentiment index dropped in January to 71.3. December’s reading was 72.9. January 2012 was 75.0.
New residential construction continued to improve in the U.S. in December. Building permits for all housing was up 0.3% in December over November and was up 28.8% over a year ago. Single-family housing was up 1.8% and 27.3% respectively. The National Association of Home Builders housing market index, while flat in January, was up 88.0% over January 2012.
