Leap year and the economy



& Company

February 29th, 2016
The Monday Morning Quarterback
A quick analysis of important economic data released over the last week
It is hard for the staff here at Elliott D. Pollack & Company to understand why Leap Day isn’t a national holiday. We haven’t heard it debated during this presidential election (or any other for that matter), which means it isn’t likely to gain any traction soon. But we think it could be a great legacy builder for any current or future Commander in Chief. In the meantime, we will keep writing about the economy every Monday and we wish a happy “one extra workday” to everyone out there!
U.S. Snapshot:
  • The “second” estimate of Real GDP for the 4th quarter of last year increased by 1.0% as opposed to the advanced estimate of 0.7%.
  • Initial claims for unemployment insurance increased from the previous week but remain near historic lows.  Initial claims are 11.7% below last year and the 4-week moving average is 7.7% below last year’s level.
  • Personal income increased 0.5% over last month and represents a 4.3% increase from a year ago. Personal consumption expenditures also increased, resulting in no change to the personal savings rate month-over month and a decline of 1.9% over last year.
  • New orders for manufactured durable goods increased in January by 4.9% which is an increase of $11.1 billion.  Transportation and defense both contributed to the increase.
  • The Conference Board consumer confidence index fell 5.6 points to 92.2 in February.  This is the first drop since November.  Consumers are feeling worse about current conditions and have a slightly more pessimistic view of future expectations.  Poor market performance is likely the culprit.  The University of Michigan consumer sentiment index declined very slightly in February to 91.7.  This is down from 92.0 in January.
  • NAR reports that existing-home sales are forecast at an annualized pace of around 5.47 million, which is now 11% higher than one year ago. This is the highest annual rate in 6 months.
  • NAR also reports that the national median existing-home price for January was $213,800 for all home types (an increase of 8.2% from a year ago) and $215,000 for single family homes (an increase of 8.3% from a year ago).
  • Sales of new single family houses in January were at a seasonally adjusted annual rate of 494,000 sales according to the U.S. Census Bureau and the Department of Housing and Urban Development. This represents a 5.2% decline compared to the same month last year.
  • According to the S&P/Case-Shiller index, housing prices as of December were 5.7% above year earlier levels as measured by the 20-city index.
Arizona Snapshot:
  • Arizona unemployment claims came in at just over 27,142 for the week of February 20th. This is down on a week over week basis by 2.3% and down by 6.9% from a year ago.
  • The Arizona Joint Legislative Budget Committee reported January 2016 General Fund revenue increasing by 4.4% over the year prior, but came in $5.7 million below their baseline forecast.  There was slower sales tax growth than expected but this was partially offset by higher individual income tax payments.  Weaker holiday spending has been confirmed with this report.
  • Statewide lodging performance continues to improve. Occupancy rose to 62.3% in January. That compares to 61.9% a year ago. Demand was up 1.0% over a year ago and supply was up 0.4% over the same period.
  • According to the S&P/Case-Shiller index for Greater Phoenix, home prices in December were 6.3% above a year earlier and 0.5% above November (see chart below).economy
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