Pollack: ‘Twas a good week


& Company


April 10th, 2017

The Monday Morning Quarterback

A quick analysis of important economic data released over the past week

Despite the fact that the employment numbers were well below expectation, it was a pretty good week for the economy.  The unemployment rate fell.  Full-time workers as a share of total employment continued to climb. And the labor force participation rate appears to be turning around.  Hopefully, payroll employment figures will get back on track next month.  Perhaps it was the weather. Perhaps it was an aberration.  It is unlikely to be the start of a trend.  We’ll know more next month.

In other news, consumer credit use was up in all categories.  Motor vehicle sales were unimpressive.  The manufacturing and non-manufacturing sectors appear to be expanding.  And private sector construction spending continues to grow.

U.S. Snapshot:

  • Total nonfarm payroll employment edged up by 98,000 in March, following gains of 219,000 in February and 216,000 in January.  Expectations were for a gain of between 125,000 and 175,000.   It is too early to tell if it was bad weather in the northeast, an aberration or something else.  One month does not make a trend.  But, it makes next month’s report more important.
  • The unemployment rate fell to 4.5% in March.  That is down from 4.7% in February and 5.0% a year ago.  As can be seen by the chart on unemployment, the labor force participation rate will have to increase or the economy will be testing lows in the unemployment rate in the not too distant future.
  • New orders for manufactured goods, which have increased in seven of the last eight months, were up by 1.0% for the month in February and were up 7.3% over a year ago.  Inventories were up 0.2% for the month and were 1.3% above a year ago.  This is a positive.
  • Consumer credit rose at a 4.8% annual rate in February.  This was expected.  It now stands 6.3% over a year ago.  Revolving credit exceeds one trillion dollars.  It grew at a 3.5% annual rate and is now 6.2% above a year ago.  Non-revolving credit continues to grow rapidly.  It consists of mainly auto and student loans.  It is approaching $2.8 trillion or almost three times credit card debt.  It grew at a 5.3% annual rate in February and now stands 6.4% above a year ago.  These rates of growth are unlikely to be sustainable.
  • Annual sales rate of motor vehicles was 16.5 million units in March.  That compares to annual rates of 17.5 million in February and 16.6 million units a year ago.
  • Both the ISM manufacturing and non-manufacturing surveys suggest that those sectors are still expanding.  Manufacturing was at 57.2 in March compared to 57.7last month.  Non-manufacturing was at 55.2 compared to 57.6 in February.  Any reading above 50 suggests that the sector is expanding.
  • Construction spending in February was up 0.8% over January and 3.0% over a year ago.

Arizona Snapshot:

  • The number of travelers who enplaned and deplaned at Sky Harbor airport declined (-1.4% and -2.0%) in February as American Airlines appears to be continuing its movement of flights out of Phoenix to other hubs.
  • The Cromford Report shows that active listings in Greater Phoenix were up in March compared to February, but, were down 10.3% compared to a year ago.  In addition, resales were up 10.9% compared to a year ago.  Median resale prices were up 6.0% from last year at $230,000.  And foreclosures (946 units) were at a level that was low compared to pre-2005 levels.
  • Listings in the Tucson MLS were down 22.5% from a year ago.  The median price of single-family homes sold in Greater Tucson rose 12.6% over a year ago in March to $214,000.


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