ELLIOTT D. POLLACK
& Company
FOR IMMEDIATE RELEASE
May 8th, 2017
The Monday Morning Quarterback
A quick analysis of important economic data released over the past week
It was a good week for economic news. The data seems to be giving an early indication that the second quarter will show a rebound from the weakness experienced in the first quarter. Employment rebounded from last month’s weakness. The unemployment rate continued to fall. The manufacturing sector improved. Disposable income continued to grow. Consumer credit continued to grow especially for autos and student loans. Auto and light truck sales rebounded modestly in April. And private sector construction continued to expand.
In Greater Phoenix, the only disappointment was a modest decline in enplanements and deplanements at Sky Harbor. This can likely be laid at the feet of American Airlines as it continues to move activity out of Phoenix. On the other hand, real estate activity continues to strengthen. Not too much to be unhappy about.
U.S. Snapshot:
- Total nonfarm payroll employment increased by 211,000 in April after a gain of only 79,000 in March. Job gains were the strongest in leisure and hospitality (55,000), education and health services (41,000), and professional and business services (39,000). Manufacturing was up 6,000 jobs. Over the past three months, job gains have averaged 174,000.
- The national unemployment rate declined from 4.5% in March to 4.4% in April. A year ago, it was 5.0%. The underemployment rate continued to decline to 8.6% in April. This was down from 9.7% a year ago.
- Nonfarm business sector labor productivity decreased at a 0.6% annual rate in the first quarter of 2017. Output increased 1.0% while hours worked increased 1.6%. Productivity now stands 1.1% above a year ago.
- Personal income increased 0.2% over February in March and now stands 4.5% over a year ago. Disposable personal income was up 0.2% for the month and was up 4.3% over a year ago. Personal consumption expenditures were flat for the month of March (compared to February) and stood 4.7% over a year earlier. The savings rate, as a result, increased to 5.9% compared to 5.7% in February and 6.2% a year ago. All of these numbers show that the consumer has the ability to spend.
- Consumer credit followed the pattern that has been the norm over the past several years. Revolving credit (mostly credit card use) was up at a 2.4% annual rate and stood 4.9% over a year ago in March. On the other hand, non-revolving credit (mainly auto and student loan debt) was up at a 6.2% annual rate and stood 6.4% over a year ago. Credit card debt is just now approaching the 2008 peak.
- Auto and light truck sales in April rebounded to 16.8 million units (at an annual rate) compared to 16.5 in March and 17.3 a year ago. While up, the 16.8 was below expectations.
- Manufacturers’ new orders increased at a 0.2% rate in March compared to February and stood 5.8% over a year earlier. New orders have increased in eight of the last nine months. The manufacturers’ inventory to sales ratio stood at 1.32. This is up modestly from February’s 1.31 but down (this is good) from 1.37 in March 2016.
- The ISM’s manufacturing index stood at 54.8 in April compared to 57.2 in March and 50.7 a year ago. Any reading of 50 or above indicates that the manufacturing sector is expanding.
- The ISM’s non-manufacturing index in April stood at 57.5. This is up from 55.2 in March and 55.7 a year ago. Again, any reading of 50 or more suggests this sector of the economy is expanding.
- Construction spending was down 0.2% for the month in March but stood 3.6% over a year ago. Private residential spending for the month was up 1.2% and stood 7.5% over a year ago. New single family was up 4.7% over a year ago and new multi-family was up 7.4% for the same period.
Arizona Snapshot:
- Aircraft operations at Sky Harbor International Airport continued to modestly decline in March as both the number of people who enplaned and deplaned declined by 0.4%. This was due to declines in operations by American Airlines at Shy Harbor as that airline continues to move operations to other hubs.
- According to the Cromford Report, resale housing activity in Greater Phoenix was 3.2% higher than the same month (April) a year ago. That’s 8,798 resales in 2017 compared to 8,523 in April 2016. The median price of resales increased to $232,500 in April compared to $221,000 a year ago. That was a 5.2% increase.
