The Monday Tuesday Morning Quarterback /A quick analysis of important economic data released over the past week
Elliott D. Pollack & Co.
The economy continues its steady upward march. Unemployment claims continue to decline, GDP expectations remained constant, and consumer credit continues to expand in both credit cards and longer-term debt.
For Arizona, the housing market is continuing its recovery. Apartment vacancies continue to decline and rents keep rising. For the single-family market, sales and prices are still significantly higher than year earlier levels and new home sales are up 14%. Also, foreclosures have become nearly a non-issue, reflecting activity during a normal real estate market.
Arizona Snapshot
Total traffic at Sky Harbor airport was up 6.0% vs. a year ago in August. Enplanements were up 5.6% and deplanements were up 6.4% over a year ago.
RealData Inc. reports apartment vacancy of 7.0% for the 3rd quarter. This is its lowest reading of the past year. Average apartment rents are up 7.7% form a year ago. Apartment inventory is up 2.2%.
Total listings in Greater Phoenix were 23,166 in September. That’s down 13.0% from a year ago. Median sales prices are 8.2% higher than a year ago.
Total homes sold in Greater Phoenix were 7,784 in August, up 12.7% from a year ago. New home sales are up 14%.
Foreclosure notices in Maricopa County are down 16.2% from one year ago. Completed foreclosures are down 20%.
Active listings in Greater Tucson are down 9.7% from a year ago while median home prices are up 4.2%. Sales are up 11.8% from a year ago.
U.S. Snapshot
Initial weekly unemployment insurance claims continue to decline (see chart below). This week resulted in 13,000 fewer claims from the previous week and represents a 9% decline from just one year ago. This suggests that labor markets are healthy and that the unemployment rate is likely to continue to decline.
The U.S. Blue Chip consensus forecast remained unaltered in terms of real GDP growth in the second half of 2015 and in 2016. Year over year, real GDP is expected to be up 2.5% this year and 2.7% next.
Inventories to sales ratio rose to 1.31. This is up from 1.20 recorded last year.
Economic activity in the non-manufacturing sector grew in September for the 68th consecutive month. The September reading of 56.9 is lower than previous monthly reports but with a reading above 50, growth is indicated.
Boosted by another gain in revolving credit (mainly credit card use), consumer credit rose $16 billion (5.6% an annual rate) in August. Revolving credit rose $4.0 billion (a 5.3% annual rate). Non-revolving credit, mainly auto loans and student debt, rose at a 5.7% annual rate. Consumers seem more willing to add to credit card debt which is a positive sign to retailers for the upcoming holiday season.
For the week of October 5th, U.S. regular gas prices were down 0.1% from the previous week and 28.6% from a year ago and now stand at $2.42.
Average mortgage rates have remained below 4% for the 11th consecutive week. 30-year fixed rate mortgages averaged 3.76% while 15-year fixed rate mortgages fell below 3% for the first time since April of this year.
