Pollack: Calm before the economic boom?


& Company


April 2nd, 2018

The Monday Morning Quarterback

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

It was a much quieter week than we have seen over the past month.  It was also a four-day week as the government did not release any data on Friday. After the last few weeks, a dull week of data is a good thing.

What was released was positive despite the recent volatility in the stock market.  That volatility should have influenced consumer confidence almost immediately if it was going to have a significant effect on the economy.  Yet, the Conference Board measure was only slightly off from February’s 14-year high and the University of Michigan measure was up in March. Other than that, income was up in February, mortgage interest rates have been flat over the last month, pending home sales were up for the month but below a year ago, and housing price increases remained about where expected.

In Greater Phoenix, Sky Harbor got busier and home prices continued to outpace inflation.

U.S. Snapshot:

  • Personal income in the U.S. increased 0.4% in February (over January) and now stands 3.7% above a year ago.  This is in line with expectations.  Disposable personal income was also up 0.4% for the month but is now 3.9% above February 2017.  On the other hand, personal consumption expenditures were up 0.2% for the month and are 4.6% above a year ago.  As a result, the personal savings rate increased from 3.2% in January to 3.4% in February.  A year ago, the savings rate was 4.1%.

  • The Conference Board’s measure of consumer confidence slid 2.3 points in March, falling to 127.7 (see chart below).  Both the present situation index and the expectations index lost some ground.  While down for the month, there is little doubt that consumers continue to feel quite good about the economy. Overall, the economy is set to boom.  Growth is already strong and will soon accelerate. A massive dose of fiscal stimulus, including both deficit financed tax cuts and federal government spending increases, has just begun to hit the economy.

  • The University of Michigan consumer sentiment index held strong the last two weeks of March as the index came in at a 14-year high.  The index now stands at 101.4 compared to 99.7 in February.

  • 30-year fixed rate mortgages ended the week at 4.44%.  This is about where they’ve been the entire month of March.

  • Pending home sales snapped back in much of the country in February, but, weaker affordability and not enough inventory in the market restricted overall activity compared to a year ago, according to the National Association of Realtors.

  • The S&P CoreLogic Case-Shiller home price index, as measured by the 20-city composite, stood 6.4% over a year earlier as of January.  On a month over month basis, the January gain over December was 0.3%.

Arizona Snapshot:

  • Activity at Sky Harbor International Airport picked up in February.  Total air traffic was up a strong 3.2% over year earlier levels due to enplanements increasing 3.5% and deplanements increasing 2.9% over year earlier levels.

  • The Greater Phoenix S&P Corelogic Case-Shiller home price index was up 5.9% in January when compared to year earlier levels.  For the month, the index rose 0.3%.

About EDPCo

Elliott D. Pollack & Company (EDPCo) offers a broad range of economic and real estate consulting services backed by one of the most comprehensive databases found in the nation. This information makes it possible for the firm to conduct economic forecasting, develop economic impact studies and prepare demographic analyses and forecasts. Econometric modeling and economic development analysis and planning are also part of our capabilities. EDPCo staff includes professionals with backgrounds in economics, urban planning, financial analysis, real estate development and government. These professionals serve a broad client base of both public and private sector entities that range from school districts and utility companies to law firms and real estate developers.   For more information, contact –

Elliott D. Pollack & company
7505 East Sixth Avenue, Suite 100
Scottsdale, Arizona 85251

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April 2018