Pollack: Ariz. job growth better than expected considering lagging construction

Lagging consruction

Lagging consructionThe Monday Morning Quarterback

A quick analysis of important economic data released over the last week

By Elliot D. Pollack and Company

More notable statistics became available this past week including revisions to Real GDP, U.S. CPI, consumer sentiment, and housing sales, among others. Most of the data for the U.S. is either neutral or positive right now.

No significant changes were made to Real GDP for the end of last year.  However, respondents indicated they are leaning toward a weaker forecast for the first half of 2015.  As of right now, 2014 ended with 2.4 percent growth, while the forecast for 2015 and 2016 calls for 3.1 percent and 2.9 percent, respectively.  These are good numbers.

Inflation figures are only useful if energy costs are backed out.  The sharp drop in oil prices dragged inflation into slightly negative territory.  Without that influence, prices increased by 1.7 percent compared to the prior year. Other statistics for the U.S. are included in the following section.

Arizona Snapshot:

The state’s employment base grew by 2.8 percent in February compared to the prior year.  Growth now stands at 2.7 percent for the first two months of the year. Considering the fact that construction is still lagging, these numbers are better than expected.  Arizona’s job growth ranking is now 14th in the nation (see chart below).  For additional perspective, greater Phoenix is leading the state with 3.3 percent job growth in February while Tucson is lagging with only 1.2 percent growth.

  • Arizona was ranked 18th in 2014 for annual growth in personal income. The state’s personal income grew by 4.1 percent in 2014 compared to 3.9 percent for the average state personal income growth for the U.S. as a whole.
  • Statewide lodging performance continues to improve. Occupancy rates in February were 74.1 percent compared to 70.6 percent a year ago. Demand was up 4.7 percent and supply was down 0.3 percent over the prior year.

U.S. Snapshot:

  • The University of Michigan consumer sentiment index for March was 93.0. This compares favorably to 80.0 reported a year ago, but not so favorable to February’s 95.4 and January’s 11-year-high of 98.1. Bad weather and rising gasoline prices were major factors causing the dip in March.
  • New home sales surged 7.8 percent in February, despite harsh winter weather, to a seasonally adjusted annual rate of 539,000 units. This is the highest level in seven years and a hopeful sign for the national housing market. Adding to the good news is a big upward revision to the January rate of 500,000 units from 481,000 units.

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