ELLIOTT D. POLLACK
& Company
FOR IMMEDIATE RELEASE
September 10th, 2018
The Monday Morning Quarterback
A quick analysis of important economic data released over the last week
The good news continues. Employment was up just over 200,000 in August although there were downward revisions for June and July. That did not change the picture, however. The unemployment rate held steady. In addition, the labor force participation rate was 62.7% over the past month. Most of the 6.2 million people who represent themselves as unemployed are probably between jobs or need new skills.
Other positive information included a strong month for both manufacturing and non-manufacturing. Motor vehicle sales remained steady. Total construction was flat for the month but was up strongly over a year ago.
In Arizona, state GDP had a good first quarter. The state data is reported with a 5-month lag and county data is reported with a much longer lag and is subject to significant revision In terms of percentage change, the state ranked 5th in what can be considered a virtual tie with 4th ranked Nevada. This is a good showing. In addition, the supply/demand dynamics of the Greater Phoenix housing market clearly remain strong especially compared to some other regional markets in the U.S. where affordability is a bigger problem. No big issues yet.
U.S. Snapshot:
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Total nonfarm payroll employment increased by 201,000 in August. This is in line with the average monthly increase of 196,000 over the past 12 months. For the month, the largest gains were in professional and business services, health care, wholesale trade, transportation and warehousing as well as mining. Both June and July employment numbers were revised downward. June was revised from 248,000 to 208,000 and July was revised down from 157,000 to 147,000. After the revisions, job gains averaged 185,000 per month over the last 3 months. The unemployment rate held steady in August at 3.9%.
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August average hourly earnings for all employees on private nonfarm payrolls rose by 10 cents to $27.16. Over the past year, average hourly earnings have increased by 77 cents or 2.9%.
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Nonfarm business sector labor productivity increased 2.9% during the second quarter of 2018 as output increased by 5.0% and hours worked increased by 2.0%. From the second quarter of 2017 to the second quarter of 2018, productivity increased 1.3%.
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The ISM’s manufacturing index rose in August to 61.3 from 58.1 in July. A year ago, the index stood at 59.3. This indicates strong growth in manufacturing for the 24th consecutive month.
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The ISM’s nonmanufacturing index registered 58.5 in August compared to 55.7 in July and 55.2 a year ago. This indicates continued growth in nonmanufacturing sector. In fact, the sector has now expanded for 103 consecutive months.
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New orders of manufactured goods showed a modest decline in July after two consecutive monthly gains. Orders were down 0.8% for the month but are still 9.0% above year earlier levels. This is a very positive year over year number.
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Construction spending in July was flat for the month but was up 5.8% from a year ago. Private construction was up 5.1% for the year while public construction was up 8.3% from a year ago.
Arizona Snapshot:
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Statewide gross domestic product, the state version of GDP, was up 6.09% in the 1st quarter of 2018. This compared to a growth of 4.72% for the U. S. as a whole. The quarterly GDP change was 5th out of the 50 states in the 1st quarter. This was just behind Nevada at 6.11% and Colorado at 6.56%. Texas at 6.91% was the second ranking state and Wyoming, a much smaller state whose economy is based on ranching and resources ranked first. In the 1st quarter of 2017, Arizona ranked 10th out of 50 states in GDP growth and in the 4th quarter, it ranked 6th. For 2017 as a whole, Arizona was the 8th most rapidly growing state.
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According to the Cromford Report, the number of active listing in the Greater Phoenix multiple listing service continued to decline in August. There were 19,736 homes listed in August compared to 20,432 in July and 21,657 a year ago. This was a decline of 8.9% from a year ago. At the same time, sales of existing homes in August were 8,230. This compares to 8,548 in July and 8,252 a year ago. Thus, the existing home market continues to tighten in Greater Phoenix, especially in the under $300,000 price range.
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The average days on market in August was 60.1. A year ago, it was 65.5.
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Median resale prices in Greater Phoenix at $262,000, were up 6.9% for the year ended August.
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
