A quick analysis of important economic data released over the last week
By Elliott D. Pollack and Company
Economic news, for the most part, continues to be positive. A look into the past week’s most prominent data for the U.S. economy shows a boost to the index of leading indicators, a benign looking headline for consumer prices, and the continuation of volatility for housing. For Arizona, last week’s data yielded typical gains in April’s employment while housing is showing general signs of recovery.
- The seasonally adjusted unemployment rate in the state dropped from 6.2 percent in March to 6 percent in April. A year ago, the unemployment rate in Arizona was 6.9 percent.
- Over the year, the state added 60,600 jobs (2.4 percent) in April. Nine of the eleven major sectors reported job gains with professional & business services, education & health services, and leisure & hospitality reporting the largest gains. Both the manufacturing sector and the natural resources and mining sector reported over the year losses.
- Greater Phoenix jobs increased by 2.8 percent over the past year. This translates to a gain of 51,300 jobs. Greater Tucson gained only 4,000 jobs over the past year for a gain of 1.1 percent. Tucson is becoming an area of major concern and policymakers in the region will need to step up their efforts.
- Leading indicators are signaling general strength in the U.S. economy as the index increased 0.7 percent in April following a 0.4 percent increase in March, and a 0.2 percent decline in February (see chart below). The boost to the index widely surpassed expectations and suggests the weaker growth in the first quarter may be over.
- U.S. consumer prices weakened in April, up only 0.1 percent. The benign looking headline masked rising pressures on many of the core components (shelter, education and medical care costs).
- The housing sector is showing a surge in April, as construction during the month recorded the best gains since before the Great Recession. Housing starts increased 20.2 percent in April and permits were up 10.1 percent. Both readings exceeded expectations for building strength in housing and is good news for the sector which has lagged behind the rest of the economy.
- On the other hand, existing home sales slowed in April but remained above year ago levels. According to the National Association of Realtors, existing home sales were down 3.3 percent in April. Despite the monthly decline, sales are still 6.1 percent above a year ago and have increased year-over-year for seven consecutive months.