The Monday Morning Quarterback: A quick analysis of important economic data released over the past week
Elliott D. Pollack & Co.
Arizona Snapshot:
Most of the local data this week related to the housing market in Greater Phoenix. The news continues to be positive and suggests that the recovery in this important sector is continuing. Increases in prices will lead to more marketable houses, higher consumer net worth and improvements in consumer confidence. Arizona weekly unemployment claims, while vastly improved from a year ago, did not make progress in the last week. November’s retail sales in Arizona also increased.
U.S. Snapshot:
The response to the recently passed fiscal cliff tax package from the Blue Chip Economic Forecast panel was a modest lowering of expectations about 2013. Consumers used their credit cards a little more and borrowed for new cars and trucks. The trade deficit was about the same as a year ago, and U.S. initial unemployment claims remained on a plateau.
Arizona
Statewide weekly unemployment claims increased modestly. This was the first increase in some time and is likely to be transitory. Initial claims in the state are now more than 40% below year earlier levels and claims paid are down over 30% from a year ago. This compares to U.S. initial claims that are down less than 5% from a year ago. On the other hand, November retail sales in Arizona rose 8.1% over September’s sales and 6.8% over November 2011 levels.
Single-family home prices continued to rise sharply between October and November. The median sales price is up 35.4% from a year ago ($120,000 vs. $162,500). Average per square foot prices are up 27.4%. Townhouse-condo prices are up 42.9% over the same period ($70,000 vs. $104.87). Prices of new homes were up 9.5% over a year ago. Overall supply (excluding homes already under contract) was down 7% at the beginning of December compared to a year ago. Distressed supply was down 43% over that period. Overall supply, though, was up by almost a third between October and December.
National
The Blue Chip Consensus Forecast now sees real GDP up 2.0% on a year over year basis in 2013. Growth in the first half is expected to be capped by the reinstatement of the full load of worker’s payroll taxes and increased taxes on high-income households. As for 2014, real GDP is expected to increase 2.6% on a year over year basis. Real personal consumption expenditures are expected to grow by 2.4% compared to 1.9% in 2013.
Consumers increased their borrowing in November at a seasonally adjusted 7% annual rate. The growth was primarily in non-revolving (non-credit card) debt used for purchases of autos and trucks. Revolving credit grew at a much slower 1.1% annual rate.
