Pollack: Arizonans more confident in state economy since 2007



October 31st, 2016
The Monday Morning Quarterback
A quick analysis of important economic data released over the past week
Halloween is here and the federal government is trying its best give the American citizen a “trick” instead of a treat. For anyone trying to get health insurance on the Affordable Care Act exchange this enrollment period, it’s not going to be pretty. Many Arizonans will find only one insurer to choose from, the rest having dropped their ACA plans due to the expense of insuring these individuals. On top of that, many areas of the state are expected to have premiums more than double. How’s that for a scare?

U.S. Snapshot:
Jobless claims remain very low and continue to point to strength in the labor market. Initial claims fell 3,000 lower in the October 22nd week to 258,000 though the 4-week average is up slightly to 253,000.
Real gross domestic product- the value of the goods and services produced by the nation’s economy less the value of the goods and services used up in production, adjusted for price changes- increased at an annual rate of 2.9% in the 3rd quarter of 2016 according to the most recent advance estimates. Real GDP now stands 1.5% above a year ago. The October Blue Chip Consensus forecast suggests that 2016 will grow by 1.5% and 2.2% in 2017, slightly lower than 2014 and 2015.
The Conference Board consumer confidence index declined to 98.6 in October, dropping 4.9 points over the revised September figure. Consumers’ attitudes toward both present conditions and future expectations took a hit this month. This level of confidence is still on par with the two-year average and only represents a 0.5% drop from last year.
The University of Michigan consumer sentiment index also weakened in October. The October level is 87.2, down from 91.2 in September and 90.0 a year ago.
Manufacturers’ new orders for durable goods orders were down 0.1% for the month but still stand 1.6% above a year ago. Durable goods orders excluding aircraft were down 1.2% for the month and 4.1% for the year.
The U.S. S&P/Case-Shiller national home price index reported a gain of 5.1% in August (20-city composite index). As the index continues to increase, more home owners with mortgages will have equity and will be able to sell their homes or be able to refinance.
Arizona Snapshot:
Arizona’s unemployment claims are now 4.6% lower than last year.
The October Arizona consumer confidence index, produced by Behavior Research Center, shows that Arizonans are more confident in the Arizona economy than at any time since 2007. Residents of Maricopa County remain more optimistic than residents of Pima County. (see chart)
The Case/Shiller index discussed above increased 5.2% for Greater Phoenix. The index now stands at 162.87 compared to the previous peak in June 2006 of 227.42. Again, as prices gradually increase, fewer homeowners with a mortgage will be under water and their home will again become a valuable asset. (see chart)


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October 2016