ELLIOTT D. POLLACK
FOR IMMEDIATE RELEASE
November 18, 2019
The Monday Morning Quarterback
A quick analysis of important economic data released over the last week
It was a typical week of mixed U.S. economic news, though investors didn’t seem phased as the Dow Jones Industrial Average reached and surpassed 28,000 for the first time in history last Friday. The S&P 500 and NASDAQ also followed suit reaching all-time highs. This points to continued optimism for the current business cycle sustain its expansion and also for progress in U.S.-China trade talks. The other positive for the U.S. economy was retail sales bouncing back from a down September. On the negative side, industrial production saw its second consecutive month of decline and inflation ticked up above the targeted 2.0% rate that the FED likes. This bears watching.
For the economy locally, the state and its two largest metros all experienced continued job gains, led by education and health services, professional and business services, and construction. The unemployment rate dropped across Arizona as a whole and in Greater Phoenix. And in Tucson, the single family market continues to tighten with a nearly 20% drop in listings and, not surprisingly, a nearly 9% increase in median prices.
Retail sales bounced back last month after a surprising decline in September of 0.3%. The October gain was 0.3% and is now up 3.1% from a year ago.
Inflation increased 0.4% in October following zero increase last month. Core inflation (all items less food and energy) had a 0.2% monthly increase and is 2.3% higher than a year ago. This is above the Fed’s 2.0% target, but not high enough for the Fed to discuss raising interest rates.
Industrial production continued to decrease in October for the second consecutive month. The index decreased 0.8% for the month and is down 1.1% for the year. Capacity utilization was down 1.0% versus September and down 3.2% from a year ago (see charts below).
Arizona’s unemployment rate (not seasonally adjusted) decreased to 4.3% in October. Greater Phoenix’s unemployment dropped to 3.7% and Greater Tucson stayed at 4.1%.
Arizona employment grew 1.1% (31,600 jobs) for the month of October and is up 2.5% (72,200) for the year. Year-to-date, the State is up 73,900 jobs (2.6%). Education and health services, construction, and professional and business have led the state in net jobs gains.
Greater Phoenix’s employment increased 1.2% for the month and 2.6% from a year ago. Year-to-date, Greater Phoenix is up 2.9% (60,800 jobs). Similar to the state, the sectors with the biggest gains include education and health services, construction, and professional and business services.
Employment in Greater Tucson grew 0.6% month-over-month and 1.7% year-over-year. Year-to-date, the Old Pueblo is up 1.9% and 7,200 jobs. The leading sectors were Education and health services, government, and manufacturing.
According to the Tucson Association of Realtors, there were 2,453 single-family listings for the month of October. This is a 19.9% decrease in from a year ago. Median sales price increased 8.7% to 250,000 in that same time period.
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.
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