ELLIOTT D. POLLACK
& Company
FOR IMMEDIATE RELEASE
November 19th, 2018
The Monday Morning Quarterback
A quick analysis of important economic data released over the last week
Let’s start with the Arizona economy this week. The only way to put it is that the state’s economy, powered mainly by Greater Phoenix, is doing very well. Greater Phoenix is, in a word, booming.
While virtually the entire spectrum of the job market is expanding, not surprisingly it is the cyclical sectors that are doing the best right now. So far this year, construction and manufacturing employment are enjoying the fastest rates of growth seen in a long time.
Rapid growth in the labor force in both Maricopa and Pinal counties are enabling the already low unemployment rates to decline only modestly (Maricopa) or stay flat (Pinal) with year earlier levels. This is a dynamic picture, especially considering that while the rate of population growth in the Greater Phoenix area has been strong relative to most other places in the U.S., the number of movers nationally and internationally has been lower in this cycle than in past cycles. Fortunately, the area’s capture rate of those moving to Greater Phoenix has picked up considerably since it bottomed in 2011. As long as the U.S. economy continues to expand, the state, and especially Greater Phoenix, will do well.
Nationally, the picture continues to be positive despite volatility in the stock market. Consumer prices remain about where the Fed wants them to be. Retail sales are strong going into the holiday season. And manufacturing sales remain strong as does industrial production.
U.S. Snapshot:
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Consumer prices as measured by the consumer price index for all urban consumers increased 0.3% in October. This was in line with expectations. Prices now stand 2.5% above year earlier levels. The index less food and energy (called the base rate of inflation) was up 2.2% from year earlier levels. Overall, core price growth as measured by the CPI is close to where the Fed wants them.
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Retail and food service sales for October were up 0.8% from September and now stand 4.6% above year earlier levels.
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Manufacturing sales were up 0.4% in September when compared to August. On a year over year basis, total manufacturing sales were up 6.6%. This is a strong performance.
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Industrial production edged up 0.1% in October and now stands 4.1% over year earlier levels. Hurricanes lowered the level of industrial production in both September and October but their effects appear to be less than 0.1% per month.
Arizona Snapshot:
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Total nonfarm employment in the state as of October stands 3.1% above year earlier levels. Year-to-date, jobs are up 2.7%. That’s an increase of 73,300 jobs. Year-to-date, the major cyclical industries lead the way. Construction employment is up 9.8% and manufacturing is up 5.2% in the state. These are strong numbers.
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The state’s unemployment rate increased to 4.7% in October from 4.6% in September. The national unemployment rate in October was 3.7%.
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Arizona now ranks 7th out of 50 states in terms of percentage employment growth for the first 10 months of 2018.
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The Greater Phoenix area enjoyed employment growth of 3.7% over year earlier levels. On a year-to-date basis, the area us up 3.2% or 64,800 jobs. Again, construction and manufacturing are doing very well, up 11.1% and 5.8% respectively. The unemployment rate for the area decreased to 3.9%.
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Greater Phoenix ranks 5th out of 35 major employment markets in the U.S. for the first 10 months of 2018. This is a strong performance.
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Nonfarm employment in Greater Tucson in October was up 1.9% from year earlier levels. Year-to-date, the area was up a modest 1.6% or 6,200 jobs.
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According to the Home Builders Association of Central Arizona, new home permits in Greater Phoenix were 1,829 in October. That’s up 19.1% from year earlier levels. Year-to-date in the Greater Phoenix area, 19,084 single family permits have been issued. That’s a gain of 14.1%. It comes on the heels of a modest decline in permits in September that had the market concerned about the effect of higher interest rates. The latest data suggest that the home building market in Greater Phoenix remains strong.
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
