The Monday Morning Quarterback: A quick analysis of important economic data released over the last week
The state is still moving forward with job growth at 2.0% for the first half of the year. Nearly all sectors gained in the first two quarters. However, far too much is being made out of the fact that housing and other local market jobs are temporarily growing disproportionate to higher value added positions. Of course this is happening. Sectors severely impacted during a recession will later post stronger rates of growth. The laws of third-grade math dictate that this will occur. Also, lower wage positions are easier to eliminate (during downturns) and are easier to recreate (during recoveries). The higher skill, higher wage jobs will come in larger numbers as businesses see more stability in the economy and the expense of hiring and training a highly paid worker is justified in their eyes. It will also come after more decisions to expand and invest occur.
The economy of the nation as a whole is moving forward but remains sluggish. While leading indicator data was flat and the unemployment rate remained
unchanged, retail sales grew at a reasonable rate. Inflation remains in check for now, but one should keep a close eye on energy prices impacting the index.
The State ranked 8th nationally in terms of employment growth through June. North Dakota was #1 and Utah was #2, followed by Texas, Idaho, and Colorado. The Statewide unemployment rate increased slightly, to 8.0% in June, compared to 7.6% for the U.S. The unemployment rate was 7.2% for Greater Phoenix and was 7.5% for Greater Tucson.
For the first half of the year, job growth in Arizona was 2.0%. The loosely reported job losses in June had to do with seasonal changes in public education employment that were consistent with recent history. After making adjustments, employment growth for June specifically was right at the year-to-date rate of 2.0%. Statewide retail sales for May were up 10.3% compared to the same time last year. According to RL Brown, median resale prices in June in Greater Phoenix were up 27.5% compared to a year ago. Housing permits for the local area were up 11.8% for the first half of the year.
The data at the national level shows only modest growth in the economy. The U.S. Composite Index of Leading Indicators was flat in June with a reading of 95.3. Declines in building permits were offset by gains in consumer expectations. This follows slight growth in the index during the past two months. The six-month trend also remains positive indicating continuing growth in the economy for the rest of the year.
The Consumer Price Index in June was 1.8% above last year and 0.5% above last month for “All Items.” When removing food and energy the index was up 1.6% above last year and 0.1% over last month. Gas prices are up 6.2% compared to last year. This trend may continue. U.S. Retail Sales grew by a respectable 5.6% in June compared to last year. The rate of growth was only 4.3% in May.