Pollack: Editorial schmeditorial!

The Monday Morning Quarterback
A quick analysis of important economic data released over the last week

Due to the holidays and vacations, we’re limiting the editorial on the Monday Morning Quarterback this week and heading straight into the data.

Nationally, we’re seeing a lot of the same: slow growth and recovery. Unemployment claims dropped modestly, forecasts for GDP are turning less negative for 2020 and more positive for 2021, and the non-manufacturing services index remained in growth territory. On the negative side, there appears to be a tightening of credit standards which has caused consumer borrowing to decrease (consumer spending makes up the lion’s share of the U.S. economy).

Here in Arizona, unemployment claims were up week over week but down compared to a month ago. And housing continues to tighten, with fewer active listings, increased resale activity, and home prices that continue to climb substantially.

U.S. Snapshot:
-Initial claims continue to slowly decrease. New filings fell by 9,000 to 840,000 in the week ending October 3rd. New claims remained up 296.2% from a year ago.

-According to the Blue Chip forecast, the real GDP rate of growth for 2020 and 2021 continue to improve on the October forecast. A decrease of -4.0% is expected in 2020. This is an improvement from the -4.6% from last month and the year low of -6.1%. A 3.9% growth rate is expected in 2021 up from the 3.8% in last month’s issue.

-The Federal Open Market Committee reaffirmed their believe that COVID-19’s effect on inflation will be disinflationary and could run below the 2% target for a significant amount of time.

-ISM’s Services PMI (formerly the Non-Manufacturing NMI) increased to 57.8 in September. This is the fourth consecutive month the index has been above the 50 level that indicates expansion in the service sector. This up from last month (56.9) and up from a year ago 53.5

-Tightening lending standards on credit cards and auto loans are putting additional supply side pressures have started to show in the as consumer credit fell back $7.2 billion in August from the July levels. The decrease was driven in totality by a $9.4 billion loss in revolving credit. Non-revolving credit had small increase.

Arizona Snapshot:
– Initial claims were up in the week ending October 3rd with 9,798. This up from 8,208 a week ago but down from 11,343 from a month ago. Overall, this the 3rd consecutive week with initial claims under 10,000 since the start of the pandemic.

-According to the Cromford report, active listings continue to fall compare to a year ago. For September, there were 13,591 down 24.4%. While resales were up by 20.5% leading to a price increase of 16.9% for the same period.

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
5111 N. Scottsdale Rd, Suite 202,
Scottsdale, AZ 85250
480-423-9200

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