by Valorie H. Rice
Senior Specialist, Business Information
Over the year job growth in Arizona was 3.0% in July according to the most recent Arizona employment report. Job growth for the nation was 1.7% in July. Arizona has been 3.0% or better every month this year except for May. The state’s annual job growth before seasonal adjustment has also been more than a percentage point over the nation every month except for May (when AZ was 2.6% and the U.S. 1.6%). Over the year employment gains for Arizona metropolitan areas in July: Prescott 6.4%, Tucson 4.2%, Phoenix 3.1%, Yuma 2.6%, Sierra Vista-Douglass 1.8%, Lake Havasu City-Kingman 0.2%, and Flagstaff -0.2%. The private sector accounted for the entire 12-month gain in July, as government employment decreased 0.2%. Education and health services garnered the most jobs over the year, while mining lost even more jobs than government. The seasonally adjusted unemployment rate for Arizona rose for the fourth straight month, moving to 6.0%, which was exactly where it stood in July of last year.
The Consumer Price Index was unchanged in July, after increasing the previous four months. Food prices were stable and energy costs went down slightly, offsetting increases elsewhere. The annual inflation rate rose just 0.8%, unadjusted.
Producer prices fell 0.4% in July after increasing the prior three months. Final demand goods were down 0.4% after three months of increases and final demand goods less foods and energy was flat. Final demand services were down 0.3% for the month. The change in producer prices over the last 12 months was -0.2% unadjusted.
Housing affordability lowered slightly in the nation and in most Arizona metro areas the second quarter 2016 because of increased home prices. The National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI) reported that 62% of new and existing homes were affordable to families earning the median income for the U.S. in the second quarter. Sierra Vista was among the most affordable housing markets in the nation with the share of homes affordable for median income in that area as 91.6%, ranking it 8 th in the U.S. The share of affordable homes in other Arizona metros was: 78.5% in Yuma, 77.5% in Lake Havasu City-Kingman, 75.1% in Tucson, 65.8% in Phoenix-Mesa-Scottsdale, 57.7% in Prescott, and 56.2% in Flagstaff.
U.S. employment increased 255,000 in July according to the August 5 Bureau of Labor Statistics release. The largest job gains for the month were in professional and business services, health care, and financial activities, while mining continued to shed jobs. The unemployment rate was unchanged at 4.9%.
The U.S. trade deficit grew larger in June to $44.5 billion, an increase of $3.6 billion from May. Both exports and imports increased over the month, but imports rose at a much higher pace, growing $4.2 billion over the month to $227.7 billion in June compared to the $0.6 billion growth in exports.
There were 1,252 bankruptcies filed in Arizona in July, a decrease of 16.0% over the year. Bankruptcies continue to trend down throughout most of the state. Year-to-date, bankruptcies were down 10.9% for the Phoenix office (covering Apache, Coconino, Gila, Maricopa, Navajo, and Yavapai counties), down 6.9% for the Tucson office (covering Cochise, Graham, Greenlee, Pima, Pinal, and Santa Cruz counties), but just slightly higher at a 0.4% increase for the Yuma office (covering La Paz, Mohave, and Yuma counties). Bankruptcies were down 9.5% statewide year-to-date in July.
Phoenix home prices appreciated 5.4% over the year in May according to the S&P/Case-Schiller Home Price Indices . This was a bit higher than the U.S. with a 5.0% change in prices. Prices in Portland and Seattle had the highest 1 year change at 12.5% and 10.7%, respectively. The most sluggish housing market was in New York with a 2.0% increase over the year for May.
Real GDP increased at an annual rate of 1.2% in the second quarter 2016 based on the advance estimate released July 29. The annual update of the National Income and Product Accounts (NIPA) was released alongside of the second quarter GDP, with revisions back to 2013. The percent change in GDP was revised up by 0.2% for both 2013 and 2015 compared to previously published figures, while 2014 remained the same. The revised annual percent change in GDP for 2013 is 1.7%, 2014 remained at 2.4% and 2015 is 2.6%.
The first quarter 2016 GDP by State released July 27th indicated that Arizona’s GDP grew at an annual rate of 2.6%, placing it 6 th among all states for percent change. Arkansas had the highest GDP growth for the quarter at 3.9%, while North Dakota was -11.4%.