The Monday Morning Quarterback :A quick analysis of important economic data released over the last week
Elliott D. Pollack & Co.
Arizona Snapshot:
The state’s personal income was up in 2012 but at a rate that was more modest than had been anticipated. The good news coming out of housing continues, especially in terms of prices. Permits, especially in Greater Phoenix, were up but not as much as had been expected. Employment continues to grow at a modest pace. Greater Phoenix is outperforming the rest of the State.
U.S. Snapshot
GDP revisions were much ado about nothing. Personal income and disposable personal income were up more than personal consumption expenditures last month. As a result, the savings rate was up (but it remains low). Initial claims for unemployment insurance were disappointing. Consumer confidence data was mixed. Manufacturers’ new orders were up, as were housing prices. Surprisingly, new home sales slowed. This will probably prove to be an aberration.
Arizona
State personal income for 2012 was up by 3.7% compared to 3.5% nationally. While results for the year for the State were lower than expected, fourth quarter figures were the best since the second quarter of 2011. Employment in the State and its major metro areas continued to slowly improve. As of February, employment in the State stood 2.0% above year earlier levels. All sectors except “Other Services” were up. The government sector accounted for more than half of the gains between January and February. The unemployment rate was 7.7% compared to 8.3% in January. Greater Phoenix employment was up 2.4% over a year ago and Greater Tucson was up a very modest 1%. Both metro areas had a 6.7% unemployment rate. Arizona weekly unemployment insurance claims stand 40.7% below year earlier levels while U.S. initial claims for unemployment insurance are down a miniscule 1.7% from a year ago.
R.L. Brown reported that Greater Phoenix new housing permits were up 15.3% over February, 2012. Year-to-date permits total 1,911 compared to 1,460 for the similar 2012 period. The February permit numbers were not as good as expected. Housing prices, though, continue to rise. This is true for both new and existing housing. New housing prices are up 18.5% over a year ago. In February alone, new home prices increased by 2.0%. Median resale prices are up 24.6% over a year ago. According to the Case/Shiller home price index, Greater Phoenix resale prices are up 23.2% over the past year compared to gains of 8.1% nationally.
National
The slight upward revision in fourth quarter real GDP was largely due to a smaller net export gap, stronger growth in nonresidential structures and somewhat higher inventory growth. But, it did not change the overall picture of weak growth overall and declines in government military spending. The good news is that inflation remains well under control. Thus, the Fed is likely to continue keeping interest rates artificially low well into the future. This is especially true since consumer confidence remains mixed. The University of Michigan index is slightly up, but the Conference Board index was down. U.S. personal income was up in February after declining in January, and disposable personal income was up more than personal consumption expenditures. Thus, the savings rate was up; but at 2.6%, it is still low.
While corporate profits reached an all-time high in the 4th quarter, new corporate cash flows were down. Manufacturers’ new orders were up in February.
