The Monday Morning Quarterback: A quick analysis of important economic data released over the last week
By Elliott D. Pollack & Co.
The past week saw an overall increase in optimism as a result of improvements in the stock market and a positive jobs report. This occurred despite the passing of the “deadline” related to sequestration. Words like deadline and “final” and “budget” do not mean the same thing in Washington D.C. as they mean here. One needs to keep in mind that the improvement in the housing markets across the country this past year served as a bit of a foundation to this week’s newly found optimism. Consumer confidence still matters.
National For the U.S. as a whole, the addition of 236,000 new non-farm jobs in February was unexpected but welcomed. This is in addition to a 7.7% unemployment rate for February (down from 7.9% in January and 8.3% from last year). Unfortunately, nonfarm labor productivity decreased at 1.9% annual rate in the fourth quarter of 2012. The forecast for real GDP for this year remains at 1.9%.
Consumer credit increased at a seasonally adjusted rate of 7% while revolving credit remained unchanged. Wholesale trade is up 3% over the previous year’s levels. The non-manufacturing sector saw growth for the 38th consecutive month in February 2013, with the ISM’s Non-Manufacturing Index at 56.9. On the other hand, U.S. manufacturers’ new orders decreased two of the last three months with a 2.0% decline in January 2013. U.S. NAR is reporting strong growth in median home prices for several metropolitan areas. Overall, the national price had the highest year-over-year growth in seven years with a 10% increase.
Arizona
For Arizona the story remains the same. The economic data related to job creation and home prices will determine confidence in the local economy. Arizona will remain a top 5 state for employment growth this year as will the Greater Phoenix region. The impacts on the state’s economy related to sequestration will be noticeable but not debilitating. A revised estimate of 30,000 lost jobs occurring over a two-year period represents only a fraction of the projected employment growth. However, specific sub-markets across the state that are disproportionately dependent on military spending will feel the impact. Does sequestration matter to Arizona? Yes. Will the state be strong enough to withstand the effects? Yes. Could the federal budget cuts occur in a more strategic manner? Again, yes.
