The Monday Morning Quarterback, a quick analysis of important economic data released over the past week
Now that the latest Washington fiasco is over (at least for now), we can assess the damage and get back to the numbers. The damage, other than a loss of face, should be temporary and minor. Most Americans, to the disappointment of the media, apparently didn’t take the event very seriously. Those federal government workers who were affected will be paid for the time they were out of work. While the rest of the world probably looks at the event with astonishment, they still recognize that the dollar and government backed bonds are still the safe haven of the world. Thus, life goes on.
Initial unemployment insurance claims are still distorted due to a backlog problem in California and temporary layoffs in the private sector tied to the government
shutdown. We will begin reporting on the series when these glitches are worked out.
Builder confidence in the market for newly built, single family homes fell two points in October from a downwardly revised reading of 55 (readings above 50 indicate builder optimism). The slight dip in builder sentiment is the result of continuing challenges in the marketplace with regard to the cost and availability of labor and lots, interest rate increases and uncertainty in Washington.
Arizona taxable retail sales increased by 9.8% in August compared to August 2012. In Maricopa County, the gain was 11.5%. Autos and light truck sales continue to be a major positive factor in the sizable gain.
R.L. Brown reported September new housing permits have generally declined or been flat on a month-to-month basis since the spring of this year. While September permits were up 13.1% over a year ago, the year-to-date numbers through September are up a modest 8.7%. It now looks like 2013 totals will be in the 13,000-13,500-permit range. This is down significantly from earlier forecasts made by most analysts.
The Southern Arizona housing market has also been disappointing as of late. Median new home prices are up a modest 7.3% over a year ago and median resale prices are up 10.6% over the year. Permits are down 14.9% since last year and total resale volume is up less than 1% year-to-date.
According to Cassidy Turley, the metro Phoenix office market continues to improve. While it still has a long way to go, vacancy rates again declined. Though the 21.2% vacancy rate recorded in the 3rd quarter of this year is way above the 15% needed for upward pressure on rents, it is a great improvement over the 27.5% recorded in the 3rd quarter of 2012. This is due to stronger absorption, especially in the 3rd quarter, and only modest new inventory.