by Valorie H. Rice
Senior Specialist, Business Information
Real Gross Domestic Product increased at an annual rate of 1.4% in the second quarter 2016 according to the September 29th Bureau of Economic Analysis release. Real GDP was 0.8% in the first quarter 2016.
Arizona’s personal income rose 1.2% the second quarter 2016, which was greater than the 1.0% increase for the U.S. according to the Bureau of Economic Analysis September 28th release. There was, however, a major downward revision to the first quarter 2016 personal income. It rose only 0.2% compared to the 1.1% originally reported primarily because net earnings were revised down.
Phoenix home prices appreciated 5.2% over-the-year in July according to the S&P CoreLogic Case-Schiller Home Price Indices released September 27th. This was in line with the national 5.1% change in home prices. The Pacific Northwest dominated the housing market, as both Portland and Seattle were the only metros in the 20-city composite with double-digit appreciation at 12.4% and 11.2%, respectively. The slowest housing market continued to be New York with a 1.7% increase over-the-year for July.
The Census Bureau released the 2015 Annual Survey of State Government Tax Collections on September 26th. State government tax revenues in the U.S. increased 4.8% between 2014 and 2015, with most of the growth coming from income taxes. Nationally, corporate income tax revenues increased 4.7% while individual income tax rose 7.9%. Increases in income tax revenues were higher in Arizona, as corporate income tax increased 20.1% and individual income tax rose 8.6%. Total tax revenues for Arizona had increased 4.9% in that time frame.
The 2015 GDP by metropolitan area data were a real mixed bag for Arizona, as were the revisions for 2014 GDP by metro area. Here are Arizona metros ranked by the percent change in GDP in 2015: Phoenix-Mesa-Scottsdale 1.8%, Yuma 1.5%, Flagstaff 1.4%, Prescott 1.2%, Sierra Vista-Douglas -1.7%, Tucson -2.4%, and Lake Havasu City-Kingman -2.5%. Tucson and Prescott figures for 2014 had substantial upward revisions. Tucson was listed at 0.5% in 2014, but that figure was revised to 1.6%, while the 2014 figure for Prescott went from 2.4% to 4.4% after revision.
Over the year job growth in Arizona was 2.1% in August according to the most recent Arizona employment report. August job growth for the nation was 1.7%. The private sector accounted for the entire 12-month gain in August. Education and health services garnered the most jobs over the year by far, while government had the heaviest losses. Over the year employment gains for Arizona metropolitan areas in July: Prescott 6.1%, Tucson 2.3%, Phoenix 2.3%, Yuma 0.2%, Lake Havasu City-Kingman 0.4%, Sierra Vista-Douglass 0.3%, and Flagstaff -0.5%. The seasonally adjusted unemployment rate for Arizona decreased to 5.8% from 6.0% in July.
Yuma once again had the highest metropolitan area unemployment rate in the nation for August at 24.6%, unadjusted. The Arizona metro area regularly trades places back and forth with El Centro, California, at 23.8% for the month, for the dubious honor. Sioux Falls, SD had the lowest unemployment rate in the nation at 2.1%. All Arizona metropolitan areas in August reported decreased unemployment rates compared to the same month last year.
The Consumer Price Index was increased 0.2% in August, after having no change in July. Food and energy prices were unchanged over the month, while prices for shelter and medical care increased. The annual inflation rate was 1.1%, unadjusted.
The American Community Survey (ACS) 2015 one-year estimates were released September 15th, providing demographic and socioeconomic data at the state, metro, and large county geographies. There was one new table added to the ACS this year – one on living arrangements of adults 18 years and over. Nationally in 2015, 34.1% of 18-34 year olds lived in their parent’s household. At 31.6%, the figure for Arizona was slightly smaller. The poverty rate fell in most areas, including Arizona. All Arizona metropolitan areas had lower poverty rates between 2014 and 2015 except for Tucson, which had no change. The percent of children under 18 in poverty improved in over half of Arizona metros, substantially so in Flagstaff and Lake Havasu City-Kingman, but lost ground in Prescott, Tucson, and Yuma. Keep in mind that the ACS five-year estimates (releasing in December) will have data for all geographic levels and contain a more robust sample than the one-year estimates.
Table 1: 2015 American Community Survey 1-Year Income and Poverty Estimates, Arizona and metros
Sources: American Community Survey, U.S. Census Bureau, and Economic and Business Research Center, Eller College of Management, The University of Arizona.
U.S. employment increased 151,000 in August according to the September 7th Bureau of Labor Statistics release. The largest job gains for the month were in service industries: food services and drinking places, social assistance, and professional and technical services. Mining continued to shed jobs. The unemployment rate stayed at 4.9% for the third month in a row.
The U.S. trade deficit whittled down to $39.5 billion in July, compared to $44.7 billion in June. July imports increased $3.4 billion over the month, while imports decreased by $1.8 billion. Year-to-date, the trade deficit was down 0.2% from the same period in 2015.
There were 1,335 bankruptcies filed in Arizona in August, a decrease of 7.5% over the year. Bankruptcies continue to trend down throughout most of the state. Year-to-date, bankruptcies were down 11.2% for the Phoenix office (covering Apache, Coconino, Gila, Maricopa, Navajo, and Yavapai counties), down 5.0% for the Tucson office (covering Cochise, Graham, Greenlee, Pima, Pinal, and Santa Cruz counties), but increased 1.1% for the Yuma office (covering La Paz, Mohave, and Yuma counties). Bankruptcies were down 9.2% statewide year-to-date in July.