ELLIOTT D. POLLACK
& Company
FOR IMMEDIATE RELEASE
May 14th, 2018
The Monday Morning Quarterback
A quick analysis of important economic data released over the last week
Late in the cycle or not, the Blue Chip consensus economic forecast expects the expansion to last at least through 2019. Following its temporary moderation in the 1st quarter, the consensus anticipates that the pace of real GDP growth will rebound the remaining three quarters of this year and will continue to grow at a reasonable rate through 2019. This is due in part to the fiscal boost from individual and corporate tax cuts enacted last December and this year’s passage of a federal budget that lifts spending by more than $300 billion over the next two years.
In other news, consumer sentiment continues to be strong. Consumers have been a little frugal with their credit cards. And, consumer prices remain under control. In Greater Tucson, housing prices are going up at a rapid clip reflecting an unusual supply/demand situation. This time around, it’s not excess demand, its lack of supply.
U.S. Snapshot:
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The Blue Chip consensus forecast for real GDP growth this year and next went unchanged from a month ago according to the early May survey. The consensus continues to forecast that real GDP will register annual growth of 2.8% (y/y) this year and 2.6% in 2019. The current economic expansion became the second longest in U.S. history this month, and, if the consensus is correct, it will become the longest on record by July 2019.
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The University of Michigan Consumer Sentiment index for early May showed the index holding steady with the final April reading of 98.8. This is also to say it remains near a 14-year high.
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Total outstanding consumer credit in March increased by 0.3% over February. This is lower than expected. This was due to a decrease in revolving credit (mainly credit cards) which was down 0.3% from last month. Non-revolving credit (mainly auto and student loans) rose at a 0.5% rate. Year over year, total consumer credit is up 5.0%. Revolving credit is up 4.8%. And non-revolving credit is up 5.1%.
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The consumer price index for all urban consumers increased 0.2% in April on a seasonally adjusted basis after falling 0.1% in March. It now stands 2.4% above year earlier levels. The index for all items less food and energy increased 0.1% in April and now stands 2.1% above a year ago. The shelter index rose 0.3% for the month with the rent index rising 0.4% and the index for owners’ equivalent rent increasing 0.3%.
Arizona Snapshot:
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Active listings in Greater Tucson declined to 3,097. This is a 2.8% decline from March and a 10.1% decline from a year ago. The total sold, 1,452 homes, was an increase of 9.0% from a year ago. The result of this supply/demand imbalance has caused the median price of a home sold in Greater Tucson to increase 2.4% for the month and 10.3% over the last year. This is nearly 3 times the gain in incomes and four times the increase in prices in general. Unlike the last cycle where the increase in prices was a function of unusually strong demand, this time the problem seems to be under supply.
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
