ELLIOTT D. POLLACK
& Company
FOR IMMEDIATE RELEASE
July 2nd, 2018
The Monday Morning Quarterback
A quick analysis of important economic data released over the last week
Happy 4th of July! This year the 4th is not the only reason for fireworks. The economy continues to do well. The current recovery/expansion is now the second longest in U.S. history. And, given the stimulus from the tax cuts and additional government spending, the economy is likely to continue to expand.
If the expansion lasts until the 4th of July 2019, it will have become the longest period of growth in the then 243-year life of the republic. Not bad at all. And while real GDP growth in the 1st quarter was a tepid 2.0%, it is likely to reaccelerate in the 2nd quarter.
In addition, corporate profits are up and consumer confidence remains at high levels as do new durable goods orders. New home sales accelerated last month and home prices are up at about three times the rate of inflation. Locally, activity at Sky Harbor continues to expand.
So, while the media continues to be obsessed with an undefined “trade war”, the economy continues to look good.
U.S. Snapshot:
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Real GDP increased at an annual rate of 2.0% in the 1st quarter of 2018. In the 4th quarter of 2017, real GDP increased at a 2.9% rate. The increase in real GDP in the 1st quarter reflected positive contributions form nonresidential fixed investment, personal consumption expenditures, exports, federal government spending and state and local government spending. That was partially offset by negative contributions from residential fixed investment and private inventory investment and imports.
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Personal income was up 0.4% for the month in May. It now stands 4.0% above a year ago. Disposable personal income was up 0.4% for the month and is up 4.0% from a year ago. Personal consumption expenditures were up 0.2% for the month and 4.6% from a year ago. This is a strong performance.
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Due to personal income increasing more than personal expenditures, the personal savings rate in May was 3.2% compared to 3.0% in April and 3.8% a year ago.
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The Conference Board’s consumer confidence index declined modestly to 126.4 in June. This is down from 128.8 in May and up from 117.3 a year ago. The index remains at a high plateau (see chart below).
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The University of Michigan’s consumer sentiment index for June increased slightly to 98.2 from 98.0 in May. The index was 95.0 a year ago. This index also remains at a high level (see chart below).
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Corporate profits also continued to increase in the 1st quarter. Profits were up 1.8% from the 1st quarter and 6.8% from a year ago.
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Manufacturers’ new orders in May were down slightly (-0.6%) but were still up 9.2% from a year ago. The less volatile non-defense (excluding aircraft) measure was down 0.2% for the month but was up 6.1% from year earlier levels.
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New home sales had a good month in May. They were up 6.7% from April and 14.1% from a year ago.
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The S&P CoreLogic Case-Shiller home price index for April showed that home prices were up 6.4% from a year ago.
Arizona Snapshot:
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Operations at Sky Harbor International Airport grew by 2.3% in May. This reflected growth in both arrivals and departures for the month.
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The above mentioned S&P CoreLogic Case-Shiller home price index for Greater Phoenix as of April stood 6.8% above year-earlier levels in April.
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
480-423-9200
