ELLIOTT D. POLLACK & Company
FOR IMMEDIATE RELEASE
March 6th, 2017
The Monday Morning Quarterback
A quick analysis of important economic data released over the last week
The news last week was good and seems to indicate that the economy is accelerating early in the new quarter. After a mediocre 4th quarter (1.9%), the first quarter of 2017 is shaping up to be better. Consumer confidence, as measured by the Conference Board, is now the highest since August 2001. Manufacturing is looking better, the non-manufacturing sector is expanding, and auto sales remain strong. Home prices are also increasing, but, at a moderate rate.
One important piece of information that will be released this week will be Arizona employment for January. This is important because the data for the last few months has indicated a slowdown in the rate of year over year growth in the state and in the Greater Phoenix area. This flies in the face of other data that we look at. This disconnect puts us at a loss to explain and, therefore, we are hoping a revision helps explain the situation. Stay tuned!!
U.S. Snapshot:
Personal income in the U.S. grew by 0.4% in January. It now stands 4.0% above a year ago. Disposable personal income was up 0.3% from December and is also up 4.0% over a year earlier. Personal consumption expenditures were up 0.2% over December. They now stand 4.7% above a year ago. The personal savings rate in January was 5.5%. These numbers indicate that consumer incomes and spending continue to increase at a rate higher than the rate of inflation. This is good news.
The Conference Board consumer confidence index rose 3.2 points in February to 114.8. The February index is the highest reading for consumer confidence since August 2001. The measures of both present and future conditions were both up.
New orders for manufactured durable goods in January increased 1.8% over the December level and now stand 0.6% below a year ago. Excluding aircraft, orders were down 0.4% from last month and up 0.5% from a year ago.
The ISM’s manufacturing index expanded to 57.7 in February from 56.0 in January and 49.7 a year ago. A reading above 50 indicates that the manufacturing economy is generally expanding. Below 50 indicates that it is generally contracting.
The ISM’s non-manufacturing index stood at 57.6 in February compared to 56.5 inJanuary and 54.3 a year ago. This is the 86th consecutive month of expansion and indicates a strong growth in real GDP.
Sales of autos and light trucks were unchanged in February with a strong level of 17.5 million units (annualized rate). This is the same reading as January and only slightly down form the 17.6 million of a year ago.
According to the National Association of Realtors, the pending home sales index declined in January to 106.4 from 109.5 in December. A year ago, the index stood at 106.0. The decline was caused by a shortage of listings. According to the NAR, interest in buying a home is the highest it has been since the Great Recession.
The S&P/Case-Shiller Composite-20 home price index grew by 0.3% in December over November. The index as of December stood 5.6% over a year earlier.
Arizona Snapshot:
The Greater Phoenix S&P/Case-Shiller home price index grew by 0.2% in December over November. For the area as a whole, home prices were up 4.9% over a year ago.
