The Monday Morning Quarterback: A quick analysis of important economic data released over the last week
Arizona Snapshot:
The state continues to be ranked near the top in terms of job creation. Relative to the other 49 states, we look great. Relative to a normal Arizona recovery, not so much. Greater Phoenix continues to lead the way. Greater Tucson, while up, continues to lag. Retail sales looked good last month. Statewide weekly unemployment claims continue to fall. Overall, not a great picture but not a bad one either.
U.S. Snapshot
Weekly unemployment insurance claims improved a little. Retail sales were up. Inventory to sales ratios in manufacturing were up a little as were producer and consumer prices. Industrial production continues to expand and capacity utilization is near the point where manufacturers are likely to spend more on plant. The only negative was that consumer confidence declined.
Arizona
While the unemployment rate in the state actually increased to 8.0% compared to 7.9% in December, the state still added 47,700 nonfarm jobs over January 2012. That’s a gain of 1.5%. While such growth would normally be considered mediocre at best, given what is going on nationally, it’s not a bad result. Indeed, all sectors but “Other Services” were up over a year ago. The largest gains were in leisure and hospitality, construction, trade, transportation & utilities and financial activities. Greater Phoenix remains the jobs hub of the state. Greater Phoenix was up 2.4% over a year ago. That’s a gain of over 41,500 jobs. In addition, the unemployment rate was 7.2%. Greater Tucson did grow by 0.9% or by slightly more than 3,000 jobs in the last year.
Retail sales in the state in January were up 10.2% over a year ago. This is a big number. Greater Phoenix was up 11.7% over the same period. These numbers indicate that consumers continue to spend, particularly on autos and light trucks.
Finally, Arizona weekly unemployment insurance claims continued to decline and now stand 38.5% below a year ago. Similar national figures are down a modest 8.5%.
National
U.S. retail sales for February increased by 1.1% over the previous month and 4.6% over a year ago (Just for clarification, we do not compare Arizona retail sales numbers on a month over month basis because we do not believe the seasonal adjustments are accurate enough. On a national level, the seasonal adjustments are more accurate). Auto and other motor vehicle dealers were up 8.8% over a year ago. Despite this, the University of Michigan Consumer Sentiment Index took a surprise plunge this month to 71.8 versus a roughly 79 pace during the last two weeks of February. The ongoing fiscal impasse is likely a cause for the sudden lack of confidence in the outlook.
Both producer and consumer prices remained under control. February U.S. producer prices were up 1.8% over a year ago while the 0.7% increase in February put the CPI-all urban consumer index up 2.0% over a year ago. There was good news in manufacturing as industrial production grew and now stands 2.5% over a year ago. The good news is not the relatively mediocre growth but in the fact that capacity utilization now stands at 79.6. Levels above 80, a level that should be surpassed in the not too distant future, have historically been associated with growth in business spending on new plant.
