|ELLIOTT D. POLLACK
FOR IMMEDIATE RELEASE
June 20th 2016
The Monday Morning Quarterback
A quick analysis of important economic data released over the last week
U.S. economic indicators were mixed this week. Foreclosures continue to drop significantly, retail sales are up, and single family construction continues to improve. However, manufacturing and capacity utilization dipped slightly.
Employment has been bumpy as of late, both nationally and locally. However, performance year-to-date for Arizona has allowed the state’s employment growth ranking to improve to 7th overall. Greater Phoenix is also doing quite well among its peer metros, ranking 4th overall in employment growth.
- Initial claims for unemployment insurance are up 13,000 for the second week in June, representing a 4.9% increase from a week ago but only a 2.2% increase from last year. The 4-week moving average is down slightly, which is a positive sign for the trend.
- Industrial production decreased in May by 0.4% compared to the month prior after an increase last month. Utilities and manufacturing both fell, though partially offset by an increase in mining production. Manufacturing declines were led by a slowdown in motor vehicles and parts production. Total industrial production now stands 1.4% below a year ago. Capacity utilization also edged lower to 74.9% (5.1%below the long run average).
- The consumer price index (CPI-U) increased 0.2% in May on a seasonally adjusted basis and remains 1.1% higher than a year ago. The base rate of inflation (all items less food and energy), was up 2.2% over the last 12 months.
- Privately owned housing units authorized by building permits in may were at a seasonally adjusted annual rate of 1,138,000. This is 0.7% above April’s revised levels, but, 10.1% below May 2015. Single family permits were up 4.8% from a year ago. Single family starts are now 10.1% above a year ago.
- Builder confidence in the market for newly built single family homes rose 2 points in June, the highest reading since January. In terms of the positive, builders have been reporting higher traffic and more committed buyers. Shortages in both in buildable lots and labor remain the ongoing concern. The expectation is for the housing market to continue moving forward during the second half of the year.
- Foreclosures nationally continue to drop, posting a 15.8% year-over-year decline. CoreLogic also reports a significant decline in the rate of seriously delinquent mortgages.
- Arizona’s unemployment claims increased in the second week of June but are still 5.4% below the same period in 2015.
- The state’s Real GDP was reported for the fourth quarter of 2015, showing an annualized growth rate of 2.3%. State Real GDP for the year was 0.9% higher than the year prior, ranking Arizona 38th nationally for GDP growth.
- While the state of Arizona lost 19,400 non-farm jobs in May, Arizona non-farm employment grew by 2.7% (70,700 jobs) over the year. Only 3 of the 11 sectors posted monthly gains, including Manufacturing (2,100 jobs); Construction (1,500 jobs); and Trade, Transportation, and Utilities (800 jobs). Arizona now ranks 7th out of the 50 states in terms of job growth so far in 2016.
- Greater Phoenix accounted for 16,700 of total jobs lost statewide (86%). Year-to-date, the metro area is still 3.4% higher than the previous year, ranking 4th out of the 32 large metros across the country. The unemployment rate stands at 4.7%.
- Greater Tucson lost 1,400 jobs for the month of May and is 3.0% higher year-to-date than last year at this point. Tucson’s unemployment rate is now 5.0%.
- According to R.L. Brown, single family housing permits in Greater Phoenix continued to show good results in May. R.L.’s data indicates that 1,586 permits were issued in May, up 8.8% from a year ago. Year-to-date through May, permits stand at 7,419 which is up 20.8% from 2015.