This Week June 5, 2015

by Valorie H. Rice
Senior Specialist, Business Information


Arizona was one of 12 states with lower unemployment rates in October according to the November 17 Bureau of Labor Statistics state-level employment report. Arizona’s 4.5% unemployment rate for October was the lowest it has been since December 2007. Several states had all-time low rates for the data series that began in 1976. Those were Alabama (3.6%), Hawaii (2.2%) and Texas (3.9%). The high and low unemployment rates in October happened outside of the contiguous states. Hawaii had the lowest rate at 2.2% and Alaska the highest at 7.2%.

Personal income increased in all Arizona counties between 2015 and 2016, ranging from 0.5% in Greenlee to 7.0% in La Paz. Local area personal income data were released by the Bureau of Economic Analysis on November 16. Using Arizona Office of Economic Opportunity population estimates, the per capita personal income for Arizona was $40,980 in 2016. [Table – % change for personal income?]

Job growth was 1.2% in Arizona from October to October. This was the slowest over the year growth the state has had since 2011. Arizona’s seasonally adjusted unemployment rate was 4.5% according to the Arizona Office of Economic Opportunity November 16 release. Education and health services replaced leisure and hospitality as the sector with the most year over year growth. The private sector accounted for all job gains, since government lost jobs over the year. Four other industries also lost jobs – natural resources and mining; trade, transportation and utilities; information; and other services. Other services has declined every month in 2017. October employment change for Arizona metros: Sierra Vista 2.6%, Phoenix 1.7%, Lake Havasu City-Kingman 1.4%, Yuma 0.0%, Prescott -0.5%, Flagstaff -0.4%, and Tucson -1.0%.

The Consumer Price Index rose 0.1% in October on a seasonally adjusted basis, according to the November 15 Bureau of Labor Statistics release. The energy index was lower for the month and food was unchanged, so the main factor in the overall increase in prices this time was shelter, which increased 0.3%. The index for all items less food and energy was up 0.2%. Annual inflation rate was 2.0% for October.

Producer prices rose 0.4% in October on a seasonally adjusted basis. Final demand goods rose 0.3% and final demand services were up 0.5%. Producer prices were up 2.8% over the year according to the November 14 Bureau of Labor Statistics release.

Bankruptcies continue to increase in Arizona this year. There were 1,359 filings in October compared to 1,247 the same time last year, an increase of 9.0%. This was the fifth month in a row over the year figures increased. Year-to-date bankruptcies were up 3.4% in Arizona. There is one portion of the state where bankruptcies are declining, however. The Yuma office, which handles filings for Yuma, Mohave, and La Paz counties was down 15.5% for October and down 10.0% year-to-date.

Housing affordability in most Arizona metropolitan areas was better than the U.S. average in the third quarter, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index. Nationally, 58.3% of new and existing homes sold in the third quarter were affordable to those earning the U.S. median income of $68,000. The most affordable metro area in Arizona was Sierra Vista-Douglas, where the share of the homes within the means of families earning local median income was 81.7%. In line after that were Yuma with 77.8%, Tucson 67.9%, Phoenix 65.8%, Lake Havasu City-Kingman 62.3%, Flagstaff 50.7%, and Prescott as the least affordable at 50.0%.

Hands and calculator photo courtesy Shutterstock.

This Week June 5, 2015

by Valorie H. Rice
Senior Specialist, Business Information


The U.S. trade deficit was $43.5 billion in September compared to the revised August figure of $42.8 billion. Both exports and imports increased over the month; however, imports increased $2.8 billion, a bit more than the increase of $2.1 billion for exports. According to the November 3 release, year-to-date the deficit in trade was 9.3% higher than the same time frame a year ago.

Total nonfarm jobs in the U.S. increased by 261,000 in October according to the November 3 Bureau of Labor Statistics (BLS) release. Industries gaining jobs were professional and business services, manufacturing, and health care. Food services and drinking places increased at a steep rate in October, though was most likely an offset of declines in September due to the impact of hurricanes. The unemployment rate notched down to 4.1%. Both August and September employment numbers were revised up with job gains averaging 162,000 over the last three months after revisions.

Phoenix home prices were up 5.8% over the year in August. This was less than the U.S. increase of 6.1%, according to the October 31 S&P CoreLogic Case-Shiller Home Price Indices release. Seattle once again had the highest year-over-year gain in home prices at 13.2%.

Real GDP rose at an annual rate of 3.0% in the third quarter 2017, according to the advance estimate release by the Bureau of Economic Analysis on October 27. Another estimate based on more complete source data will be released November 29. Real GDP had increased 3.1% in the second quarter 2017.

Arizona job growth was 1.3% year-to-year in September, just above the U.S. growth of 1.2%. Arizona’s seasonally adjusted unemployment rate moved down to 4.7% from 5.0% in August according to the Arizona Office of Economic Opportunity October 19 release. Leisure and hospitality continues to be the sector with the most year over year growth, followed closely by education and health services. Information, other services, and natural resources and mining all decreased employment. Year-to-year employment changes for Arizona metros in September: Sierra Vista-Douglas and Lake Havasu City-Kingman 2.3%, Phoenix 1.7%, Yuma 1.3%, Flagstaff 0.6%, Prescott 0.3%, and Tucson -0.6%.  

The Consumer Price Index increased 0.5% in September on a seasonally adjusted basis, according to the October 13 Bureau of Labor Statistics release. Once again, gasoline prices were a major factor in overall price changes. The index for all items less food and energy was up 0.1%. Annual inflation rate was 2.2% for September.

Hands and calculator photo courtesy Shutterstock.

The buzz about the Tucson economy is strong, with many more firms announcing plans to add jobs here than there were in 2016. But while the buzz is strong, actual job growth in 2017 has been mediocre.

Firm Announcements of Job Increase 
Firm Announcements of Job Increase

In 2016, Tucson posted the fastest job growth since 2012. Even so, growth was slow compared to peer metropolitan areas, Arizona and the nation. Most new jobs were in service-providing sectors. In an encouraging development, manufacturing added more than 600 jobs last year, driven by gains in the high-paying aerospace sector. Where will job growth be next year? Will announcements of job increase translated into faster employment gains?

The U.S. dollar has lost ground to the Mexican peso lately but remains stubbornly high. The strong dollar is weighing on Arizona’s exports to Mexico, our most important trading partner. Will the dollar continue to fade next year against the peso? When will that translate into improved export performance?

While the U.S. economy continues to grind out growth, monetary policy is transitioning and fiscal policy seems poised for change. What’s next for the stock market, monetary policy, fiscal policy? What will the new political environment mean for future U.S. and global growth?

Join us for lunch at the Westin La Paloma Resort and Spa in Tucson, Arizona, as George W. Hammond, Ph.D. Research Professor and Dirrector of the Eller College’s Economic and Business Research Center and chase Chief Economist anthony chan, Ph.D. tackle these issues and more… Register today!

Event Details

Friday, December 8, 2017 
Registration: 11:30 a.m.
Luncheon: Noon-1:30 p.m.

Westin La Paloma Resort & Spa 
3800 East Sunrise Drive 
Tucson, Arizona

Cost: $80 per person, $800 per table of 10 before November 21 (add $5 per person after November 21)

Please note that no portion of your individual ticket or table payment qualifies as a charitable contribution.


Register and Pay Online

Individual ticket price is $80, and a table of ten may be purchased for $800.

You will be directed to the University of Arizona Foundation Eller 2017 Economic Outlook Luncheon payment website that opens in a new browser window.

register online for the economic outlook luncheon 2017

Please note that no portion of your individual ticket or table payment qualifies as a charitable contribution.


Presenter Bios

George W. Hammond brings a wealth of experience in state and local econometric forecasting and regional economic analysis, as well as, wide-ranging academic research interests to bear on his role as director of the Eller College’s Economic and Business Research Center. A specialist in econometric forecasting for more than 20 years, he has designed, built and used economic models to produce more than 100 forecasts for state and local economies, and completed more than 50 regional economic studies on topics including economic and workforce development, energy forecasting and the impact of higher education on human capital accumulation.

Anthony Chan joined J.P. Morgan in 1994 and currently serves as the chief economist for Chase. His responsibilities include economic analysis and research in support of Chase and the Private Bank’s Global Investment Committee. A member of several forecasting panels, Chan received his bachelor’s degree in finance and investments from Baruch College in 1979 and his master’s and PhD degrees in economics from the University of Maryland. After completing his doctoral studies, he was a professor of economics at the University of Dayton. He served as an economist at the Federal Reserve Bank of New York from 1989 to 1991 and was a senior economist at Barclays de Zoete Wedd Government Securities from 1991 to 1994.

This Week June 5, 2015

by Valorie H. Rice
Senior Specialist, Business Information


Startup firm creation is one of the statistics that can be gleaned from Business Dynamics Statistics that were released by the Census on September 20. The net job creation rate for Arizona in 2015 was 3.1% while it was 2.5% for the U.S. States surrounding Arizona also did better than the nation, with California having 3.9%, Nevada 3.6%, Utah 5.1%, New Mexico 4.0% and Texas 3.3%. 

Net Job Creation Rates by State

The Bureau of Economic Analysis released the 2016 GDP by Metropolitan Area on September 20.  Real GDP grew at a rate of 1.7% for metropolitan areas combined. Phoenix and Yuma had the most growth of Arizona metros at 2.6% for both. Sierra Vista-Douglas had positive growth for the first time in over four years with 0.3%. Statistics for 2001-2015 were revised with this release. Percent change in real GDP for Arizona metros:  Flagstaff 1.9%, Lake Havasu City-Kingman 2.1%, Phoenix 2.6%, Prescott 3.5%, Sierra Vista 0.3%, Tucson 0.2%, and Yuma 2.6%

The 2016 American Community Survey (ACS) one-year estimates were released on September 14. Did you know that Arizona households have a higher percent of computers than the nation? Over 90% of household in Arizona have one or more types of computing (this includes desktop or laptop computers, smartphones, and tablets). Other data for Arizona indicate that the median household income increased to $53,558, that 90.0% of Arizonans have health insurance coverage (either private or public), and the poverty rate decreased. The one-year ACS provides a multitude of data on the U.S., states and local areas 65,000 or more, while data on all areas will be released in December with the five-year estimates.

Arizona job growth was 1.3% over the year in August. This was the first time in a while that Arizona growth was below the U.S. (at 1.5%). Arizona’s seasonally adjusted unemployment rate was 5.0% according to the Arizona Office of Economic Opportunity September 14 release. Leisure and hospitality was once again the sector with the most year over year growth, followed by education and health services. Information and other services both decreased employment. August employment gains for Arizona metros in order of increase: Phoenix 1.8%, Yuma 1.7%, Lake Havasu City-Kingman 1.4%, Prescott 1.3%, Flagstaff 0.9%, Tucson 0.4%, and Sierra Vista -1.5%.  

The Consumer Price Index increased 0.4% in August, seasonally adjusted. Once again, gasoline prices were the main factor in overall price changes with gasoline and shelter both going up. The index for all items less food and energy rose 0.2%. The annual inflation rate, according to the September 14 release, was 1.9%.

Producer prices rose 0.2% in August on a seasonally adjusted basis according to the September 13 Bureau of Labor Statistics release. Final demand goods rose 0.5% and were the primary reason for the increase in final demand index for the month. Final demand services were up just 0.1%. Producer prices were up 2.4% over the year.

Hands and calculator photo courtesy Shutterstock.

By George W. Hammond, Ph.D.
Director and Research Professor, EBRC


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Everyone knows that an individual’s education is highly correlated with income. This is also true for states, cities, and even neighborhoods. The latest data from the Census Bureau (for 2015) lets us explore the correlation between four-year college attainment rates and income levels for Arizona’s neighborhoods (Census tracts). As you might expect, neighborhoods with more highly educated residents also tend to have higher income levels. For metropolitan statistical areas (MSAs), these correlations reflect not just the fact that highly educated individuals get paid more, but also the fact that cities with more highly educated residents are more productive, innovative, and competitive.

EBRC research economist Alan Hoogasian has built a new interactive map which allows you to explore this relationship in your community. Be sure to interact with the map! Choose the data you are interested in exploring, then click on the map and it will pop up a box with the underlying data. You can also zoom in on Phoenix, Tucson, or any county in the state. Use the map tools to view results for custom combinations of Census tracts.

Want to know more about Arizona’s trends in income and education? Check out Ranking Arizona: Income and the Quality of Life, Losing Ground: Arizona’s Long-Run Per Capita Personal Income Trends, and Troubling Trends in Arizona’s College Attainment Rate.

 

Ranking Arizona: Income and the Quality of Life

By George W. Hammond, Ph.D.
Director and Research Professor, EBRC


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While Arizona is a rapidly growing state, it does not fare so well in terms of monetary measures of its standard of living. As Exhibit 1 shows, the state’s per capita personal income, after adjustment for inflation and the cost of living, ranked 47th in the nation in 2015. That was 14.5% below the U.S. average. It was also well below most western states, with the exceptions of Utah and New Mexico. This analysis uses the Arizona Office of Economic Opportunity population estimate for Arizona, in contrast to the Census population estimate used by the U.S. Bureau of Economic Analysis (BEA), which publishes the data.

Arizona’s per capita income ranked low in large part because wages tend to be low in Arizona. It was also related to the state’s relatively low employment-population ratio (driven by demographics), income from dividends, interest, and rent, and transfer income.

Exhibit 1: Arizona Per Person Income Ranked Low In 2015
U.S. State Per Capita Personal Income, Adjusted for Inflation and the Cost of Living
Exhibit 1: Arizona Per Person Income Ranked Low In 2015 U.S. State Per Capita Personal Income, Adjusted for Inflation and the Cost of Living

The cost of living, as estimated by the BEA, covers all the main costs faced by households: housing, food, transportation, as well as many other goods and services. The 2015 data are the latest available from the BEA, because there are long data lags in the estimation of housing costs. Exhibit 2 shows that Arizona’s cost of living was roughly in the middle of the pack, ranking 26th in the nation at 3.8% below the national average. The state’s cost of living was well below that of most western states, particularly California. It was slightly above the levels estimated for New Mexico and Idaho, and very close to Texas.

Exhibit 2: Arizona’s Cost of Living Was in the Middle of the Pack
Percentage Difference Between U.S. and State Cost of Living in 2015
Exhibit 2: Arizona’s Cost of Living Was in the Middle of the Pack Percentage Difference Between U.S. and State Cost of Living in 2015

While Arizona ranks low on pecuniary measures of the standard of living, it is important to remember that money is just one dimension of a state’s quality of life. Other measures might include climate, crime, pollution, and myriad other factors. The problem for economists boils down to how to combine all of these dimensions into one indicator or ranking. One method that has been proposed in the economic literature is a “voting with your feet” ranking, which exploits domestic migration flows across states. The idea is that the number of people moving to/from a state tells us something important about the overall standard of living available to residents of that state. I use PUMS ACS Five-Year (2011-2015) domestic migration estimates from the Census Bureau.

The method is based on competition: each state is pitted against the other in the competition for migrants. If state A attracts more residents from state B than it loses to state B, then state A wins and we put a +1 in state A’s win/loss column. If state A loses more residents to state B than it attracts, then state A loses and we put a -1 in its win/loss column. Then we sum the wins/losses for state A, which gives us state A’s win/loss record. We do this for all states versus all states and then rank states by their win/loss records.

Exhibit 3 shows the results from one such analysis. States that rank high are shaded darker rank higher than states shaded lighter. Note that states in the Southeast, South, and West tended to rank highest. States in the Northeast and Midwest tended to rank lowest. Arizona ranked in the top 10, which is quite a contrast with its per capita income rank. This reflects the fact that Arizona’s climate is a powerful draw and a significant part of its attractive standard of living.

One issue to keep in mind, however, is that the analysis so far reflects the decisions of all migrants, including retirees. If we restrict the analysis to migrants under the age of 65, then Arizona drops out of the top 10 and into the middle quintile. Thus, while Arizona is an attractive migration destination, it is not quite as attractive to those individuals most likely to move to improve their economic prospects.

Exhibit 3: Arizona’s Standard of Living Ranked in the Top 10
Ranking Based on Domestic Migration Data from PUMS ACS 2011-2015
Exhibit 3: Arizona’s Standard of Living Ranked in the Top 10 Ranking Based on Domestic Migration Data from PUMS ACS 2011-2015

During the past 40 years, Arizona has gradually fallen further and further behind the nation in per capita income, with slow wage growth contributing to the divergence. One key factor driving this has been the trend in Arizona’s four-year college attainment, which has drifted from well above the national average in the 1940s to significantly below average today. If Arizona’s college attainment rate continues to lag behind the national average, it will be very difficult to close the income gap in the future.

By George W. Hammond, Ph.D.
Director and Research Professor, EBRC


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Arizona continues to add jobs, income, and residents at a faster pace than the nation. However, gains are coming at a slow pace compared to the state’s own history. Demographics (aging of the baby boom generation) is likely playing a role here, and this will continue to be an issue in the long run.

The 30-year forecast calls for Arizona to outpace the national rate of growth. However, that is not likely to be true for the state’s growth in per capita income. This is expected to remain positive and outpace inflation, but the state is not expected to beat the national rate. That means Arizona is forecast to lose ground to the nation on a key measure of prosperity.

During the past 40 years, Arizona has gradually fallen further and further behind the nation in per capita income, with slow wage growth contributing to the divergence. One key factor driving this has been the trend in four year college attainment, which has drifted from well above the national average in the 1940s to significantly below average today. If Arizona’s college attainment rate continues to lag behind the national average, it will be very difficult to close the income gap.

Arizona Recent Developments

Arizona’s job growth continued at a moderate pace in the second quarter of 2017. Over the year, the state added 54,200 jobs, which translated into 2.0% growth. That was slightly slower than the 2.1% rate posted in the first quarter, but above the national rate of 1.5%. The Phoenix metropolitan statistical area (MSA) added 50,300 jobs over the year in the second quarter, for 2.6% growth. The Tucson MSA added just 700 jobs over the year, for 0.2% growth.

While job growth performance has not been particularly rapid so far this year, the buzz related to employment change has been unusually strong. The Economic and Business Research Center has been tracking firm announcements related to employment change since 1999. Exhibit 1 shows monthly announcements by firms related to both employment increase and employment decrease. This particular dataset tracks the number of announcements, not the number of jobs associated with the announcements. These announcements appeared in the major news outlets around the state, including the Arizona Republic, the Arizona Daily Star, among many others. Most of the announcements related to future expected employment changes at firms.

Exhibit 1: The Buzz About Arizona Employment Is Strong
Monthly Number of Firm Announcements Related to Job Increase or Decrease (Twelve Month Centered Moving Average)

Monthly Number of Firm Announcements Related to Job Increase or Decrease (Twelve Month Centered Moving Average)

While these announcements are related to future changes in published job data, the connection is loose. Nonetheless, our analysis of suggests that there is currently a lot more buzz about employment increase so far this year than in the past. For more on the characteristics of these data and for analysis of the trends for Phoenix and Tucson, see the Forecasting Project Directors Blog online at forecast.eller.arizona.edu.

According to preliminary data, Arizona’s personal income rose by 3.8% over the year in the first quarter of 2017, a bit above national growth of 3.1%. Gains in the first quarter reflected increases in net earnings from work (up 3.9%); dividends, interest, and rent (up 3.8%); and transfers (up 3.3%). The increase in net earnings from work was a bit disappointing, given that the state’s minimum wage increased substantially in January. Indeed, average wages per worker (calculated as total wage and salary disbursements divided by total nonfarm jobs) rose just 1.8% over the year. Keep in mind, however, that the preliminary wage and salary data are estimated based on nonfarm job growth and an econometrically-estimated “scale factor.” The revised data, available in September, will provide a better indication of the impact of the minimum wage increase on income, since wage and salary disbursements in that release will be based primarily on the Quarterly Census of Employment and Wages.

Arizona Outlook in the Long Run

Exhibit 2 shows the long-run history and forecast for Arizona and U.S. job growth. The forecast calls for Arizona to add 1.6 million jobs during the 2017 to 2047 period, which translates into annual growth of 1.5% per year. That is well below the state’s average growth rate during the 30 years before the Great Recession and below the state’s average growth rate during the previous 30 years (1986-2016) of 2.4% per year. However, as the exhibit shows, Arizona is forecast to far outpace the national average rate of 0.7% per year. Slower growth for both Arizona and the U.S. is driven by a major demographic transition, as baby boomers retire in large numbers.

Exhibit 2: Job Growth Slows in the Long-Run for Both Arizona and the U.S.
Annual Growth Rates

job growth Tucson, Phoenix, Arizona

Service-providing sectors account for most of Arizona’s job growth during the forecast. Indeed, education and health services; trade, transportation, and utilities; and professional and business services together account for 60.7% of total job gains during the next 30 years. The remaining service-providing industries together account for 35.3% of state job growth. Which leaves 4.0% for the goods-producing industries (mining, construction, manufacturing).

With solid, but slowing job growth during the next 30 years, Arizona’s population is projected to increase as well. The state is forecast to add 3.2 million new residents during the 2017-2047 period, for annual growth of 1.3% per year. That is a bit more than double the national rate of 0.6% per year. That growth is increasingly driven by net migration, as natural increase (the annual difference between births and deaths) decelerates due to the aging of the population.

Steady job gains translate into continued income growth, which is forecast to average 2.6% per year during the next 30 years, after adjustment for inflation. That outpaces the U.S., which is forecast to generate income growth averaging 2.0% per year after adjustment for inflation. Arizona’s income growth reflects gains across all three major sources: net earnings from work; dividends, interest, and rent; and transfers.

Both the Phoenix and Tucson MSAs are forecast to add jobs, population, residents, and income during the forecast. However, growth is expected to be much more rapid in Phoenix than in Tucson. Exhibit 3 shows population growth for Phoenix and Tucson during the next thirty years. Phoenix is expected to add 2.6 million new residents during the period, which translates into 1.5% growth per year. Tucson is forecast to add 227,000 residents, which translates into growth of 0.7% per year on average. Thus, growth in Phoenix is just over double the national pace, while Tucson’s growth is just slightly above the nation.

Exhibit 3: Population Growth in Phoenix Outpaces Tucson
Annual Growth Rates

population growth Tucson, Phoenix, Arizona

Risks to the Outlook

In the long-run, the risks to the outlook revolve around the major drivers of economic development: labor force growth, productivity and innovation, investment in the physical capital stock, and human capital development.

Slowing labor force growth, driven by retirement of baby boomers, is already built into the baseline forecast. If growth turns out to be even slower, that will reduce state growth as well.

The national baseline forecast assumes that productivity growth rebounds from the weak performance of recent years. If that fails to materialize, look for slower than expected gains nationally and in Arizona.

Investment in the private physical capital stock is expected to slow during the forecast, but if growth turns out to slow more than expected, it will reduce overall economic performance. In addition, remember that infrastructure (highways, roads, water, sewer, airports, border ports, rail, telecommunications) matters as well.

Human capital (typically measured by educational attainment) will continue to matter. For Arizona, this is particularly important, because the state already lags well behind the nation. If Arizona’s education gap rises during the next 30 years, it will set the stage for ever larger income gaps with the U.S.

Finally, water remains a concern for the long run. Shortages in the West have the potential to drive up residential and business costs and restrict growth.

Forecast data for Arizona, Phoenix MSA, and Tucson MSA.

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This Week June 5, 2015

by Valorie H. Rice
Senior Specialist, Business Information


Employment increased in 299 of the 346 largest counties in the United States between March 2016 and March 2017 according to the first quarter 2017 County Employment and Wages (QCEW) release from the Bureau of Labor Statistics. Maricopa County had one the largest numerical increases in employment, adding 48,500 workers, which translated into an increase of 2.6%. Pima County had an increase of 1.5% for the same period, in line with the U.S. figure of 1.6%. Wages improved in the first quarter compared to last year (they had decreased year-over-year in the fourth quarter 2016). Average weekly wage increased 6.6% in the U.S., 8.1% in Maricopa and 7.1% in Pima between the first quarter 2016 and first quarter 2017.

Bankruptcy filings in Arizona were up 14.1% over the year in August, with 1,523 compared to 1,335 in August of last year.  Both the Phoenix and Tucson offices had higher number of filings, while the Yuma office (La Paz, Mohave, and Yuma counties) had fewer over the year.

The U.S. trade deficit notched up a tad in July to $43.7 billion, a change of $0.1 billion over the month prior. Both exports and imports were down for the month; however, exports at $194.4 billion were down $0.6 billion compared to imports at $238.1 billion which were down $0.4 billion. Year-to-date, the deficit in trade was 9.6% higher than the same period a year ago.

There was an increase of 156,000 total nonfarm jobs in the U.S. during August according to the September 1 Bureau of Labor Statistics (BLS) release. Industries gaining jobs were manufacturing, construction, professional and technical services, health care, and mining. The August unemployment rate was 4.4%, which has oscillated between 4.3% and 4.4% since April. Both June and July jobs numbers were revised down, with employment gains averaging 185,000 per month for the last three months after revisions.

The second estimate for second quarter 2017 real GDP was 3.0% according to the August 30 Bureau of Economic Analysis release. The earlier estimate for the quarter had been 2.6%. Increases in personal consumption expenditures and nonresidential fixed investment were larger than previously estimated, bringing the current estimate higher. A third estimate for the quarter will be released September 28. Real GDP was 1.2% in the first quarter 2017. 

Phoenix home prices increased 5.8% over the year in June, the same rate as the U.S., according to the August 29 S&P CoreLogic Case-Shiller Home Price Indices release. Seattle continued to have the highest year-over-year gain in home prices at 13.4%, while Cleveland had the smallest change at 2.9% for June. The national house price index level is now higher than at the 2006 peak.

Hands and calculator photo courtesy Shutterstock.

Measuring Economic Performance: Growth, Prosperity, and Inclusion

by George W. Hammond, Ph. D.
Director and Research Professor


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Benchmarking economic performance across metropolitan areas requires us to think about activities across many different dimensions. Certainly, overall job, population, and income growth matters, but growth rates alone do not tell us much about prosperity. On that dimension, economists generally resort to measures like per capita income, per worker Gross Domestic Product (an indicator of productivity), and per worker wages. However, these standard measures of prosperity also have limitations. In particular, they do not tell us anything about how equally income is shared across a metropolitan area’s residents. To address this dimension of economic performance, we need indicators of economic inclusion. The Brookings Institution recently constructed rankings of economic inclusion for the 100 largest metropolitan areas in the U.S. How do Arizona’s two largest metro areas stack-up?

Brookings provides rankings for three overlapping timeframes: 2005-2015 covering the Great Recession; 2010-2015, the post-recessionary recovery period; and 2014-2015, the latest year for which there are data to calculate these measures, Figure 1. 

economic inclusion US large  metro areas

Making Action Possible for Southern Arizona DashboardTo continue reading and for a summary of recent research on economic inclusion and a discussion of these rankings visit EBRC’s MAP Dashboard.

 

This Week June 5, 2015

by Valorie H. Rice
Senior Specialist, Business Information


House prices continued to increase in nearly all states according to the Federal Housing Finance Agency second quarter 2017 House Price Index (HPI). House prices appreciated 8.4% over the year in Arizona on a seasonally adjusted basis for the second quarter 2017, a bit above the U.S. at 6.6%. Prices in Washington rose the highest at 12.4%, while both Alaska and West Virginia had decreased home prices. The release provides home price data for metropolitan areas using the All-transactions HPI, which includes both purchase and refinance mortgages. The one-year change in home prices for Arizona metros for the second quarter was: 8.0% in Flagstaff, 7.1% in Lake Havasu City-Kingman, 9.1% in Phoenix-Mesa-Scottsdale, 9.3% in Prescott, -0.9% in Sierra Vista-Douglas, 7.6% in Tucson, and 6.0% in Yuma. 

Arizona job growth of 1.7% over the year in July was higher than the U.S. figure of 1.5%. The Arizona unemployment rate was stable at 5.1% for the third month in a row according to the Arizona Office of Economic Opportunity report released on August 17. Leisure and hospitality was once again the sector with the most year over year growth, followed by education and health services. Natural resources & mining, information and other services all lost jobs. Over the year employment changes in Arizona metro areas for July were: Flagstaff 1.7%, Lake Havasu City-Kingman 1.5%, Phoenix 2.2%, Prescott 0.8%, Sierra Vista -2.4%, Tucson 0.6%, and Yuma 3.9%.  

The Consumer Price Index rose 0.1% in July on a seasonally adjusted basis, after having no change in June. The Bureau of Labor Statistics August 11 release indicated that the index for all items less food and energy rose 0.1% for the fourth month in a row. Prices for medical care, food and shelter all rose while energy prices declined. The annual inflation rate was 1.7% in July.

Producer prices decreased in July by 0.1%, seasonally adjusted. The drop in producer prices was mostly attributable to the decline of 0.2% in final demand services. Final demand goods were also lower by 0.1% for the month. Over the year, the final demand index rose 1.9% on an unadjusted basis in July according to the August 10 Bureau of Labor Statistics release. 

Housing affordability was a bit lower in the second quarter not only for the U.S. but most Arizona metropolitan areas as well, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index. The August 10 release indicated that rising house prices was a factor in lowering affordability. Sierra Vista-Douglas, at 83.8%, had the highest share of homes in Arizona were the median sales price of homes was affordable to families earning the median income for that area (down from 86.6% in the first quarter). Yuma at 76.1% was second highest followed by Tucson at 72.3%, Lake Havasu City-Kingman at 67.5%, Phoenix at 66.0%, Flagstaff at 53.8% and Prescott at 51.3%. Prescott was the only Arizona metro area to post a higher share for the second quarter, moving up from 49.2% in the first quarter, but was still the least affordable in the state. Nationally, 59.4% new and existing homes sold in the second quarter were affordable for median-income earners – only Flagstaff and Prescott were less affordable than the nation.

Hands and calculator photo courtesy Shutterstock.