The Monday Morning Quarterback: A quick analysis of important economic data released over the last week
By Elliott D. Pollack & Co.
Arizona Snapshot:
Statewide retail sales grew at 13.1% for March compared to last year, but the data looks to be influenced by monthly adjustments rather than soaring consumer confidence and/or significantly more spending. As we continue to see positive economic news and as consumers that have jobs feel more and more confident that those jobs are secure, spending activity should continue to improve.
U.S. Snapshot
The big story this week was the modest recovery in U.S. Real GDP. First quarter 2013 data showed growth of 2.5% on an annualized basis. Some were expecting more given the 0.4% adjusted figure for the fourth quarter of 2012. However, the end of 2012 saw a weakening in the data compared to the 3rd quarter because of federal government spending shifts that were more political than economic, and an inventory adjustment that brought the figure down even more. Comparing apples to apples, the 2.5% rate of growth is just fine.
Arizona
Statewide retail sales grew at 13.1% for March compared to last year, but the data was impacted by accounting adjustments. The baseline figure this spring is probably closer to 5.0%. However, as we continue to see positive economic news and as consumers that have jobs feel more and more confident that those jobs are secure, spending increase should continue. The uncertainty relates to the degree. This causes many problems with government budgeting.
Moving forward, state and local employment changes will be the most important data to monitor. The sequestration activity (that has also been more political in application the past month), will indeed eventually impact these statistics. Temper future expectations in terms of the state and local employment data, but not too much.
National
Again, first quarter 2013 data showed Real GDP growth of 2.5% on an annualized basis. This was welcomed improvement over the last quarter of 2012 which was adjusted upward to only 0.4%. The GDP price deflator remains as a relatively low 1.6% as of the first quarter of 2013.
U.S. initial unemployment claims continue to decrease with an 11.0% decline from year prior levels. Although consumer sentiment was revised upwards for April, the 76.4 reading is down from last month and matches the April 2012 reading. Despite consumer sentiment’s decline, new home sales were up in March at a seasonally adjusted annual rate of 417,000. This was 18.5% above March 2012. March’s median sales price of new homes also increased over 2012 levels by 3.0%, but was down 6.8% compared to February 2013.
We are moving in the right direction and the airplane has finally left the gate. But, the government will be keeping us on the runway for a while longer. It is also unclear who is actually piloting the plane right now.
