Pollack: An empty feeling

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

By Elliot D. Pollack & Co. | Rose Law Group Reporter

Our hearts are with the people of Ukraine and reporting on economic data feels a bit hollow right now. Any economic pain we may end up feeling pales in comparison to the senseless devastation and loss of life from war and violence occurring in Ukraine and elsewhere.

War and geopolitical tensions create disruptions and uncertainty. Add to that the widespread deployment of sanctions that have spread to numerous industries and affected both the supply of goods and, as a result, price volatility. With these factors ongoing and everchanging, the ripple effects are impossible to forecast at this point in time. We now face constant headlines describing such senseless and atrocities and it’s hard to feel secure despite our physical distance from war.

This week brought in positive economic data that bolsters some optimism for economic conditions and the ability to weather the economic disruptions that are beginning to surface from the invasion of Ukraine by Russia. The February jobs report revealed very strong jobs growth, including upwardly revised results in both December and January. The U.S. is still very much on track for economic recovery from job losses due to COVID-19. The unemployment rate hit a two-year low and our tight labor market is expected to continue.

Here locally, the same housing story has been verified with a new month of data. New sales and resales have declined on a year-over-year basis due to the lack of supply and prices continue to rise by 26%-28% despite mortgage rate increases. Demand continues to outpace supply.

U.S. Snapshot:

  • U.S. employment continued to flourish despite labor constraints. The U.S. added 678,000 jobs in February. The majority of gains were in Leisure & Hospitality, Educational & Health Services and Trade, Transportation, & Utilities. No sector lost jobs, but the Information sector remained at the same level.
  • The U.S. recovered 19.9 million or 90.4% of jobs lost through February 2022. Four out of eleven supersectors have fully recovered. Leisure & Hospitality lost the most jobs, with an estimated 8.2 million, and currently has recovered 6.7 million of those jobs.
  • Labor constraints continue as the unemployment rate dropped to 3.8% from 6.2% a year ago.
  • The ISM’s Manufacturing Index increased while the Services Index declined in February. Manufacturing came in at 58.6, up from 57.6 in January. Services level was down to 56.5 and the second-lowest level since February 2021. Both indices continue to signal growth in their sector.

Arizona Snapshot:

  • New home sales were down and resales were essentially flat from a year ago in Maricopa County, according to the Information Market’s February data. New home sales saw a decline of 14.2% and a price increase of 25.8%. The number of resales dropped less than 1%, but the price increased 27.8%. Despite higher interest rates, housing activity and price increases continued in the county
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March 2022