Arizona (and the West) Shall Rise Again – Just you Wait! 48 th ASU/Chase Economic Forecast

Getting Better? Or Worse? Arizona Adding Jobs - Slowly Full Recovery is Years Away Long Term Outlook is Positive Arizona Update & Outlook

How Long Is Long Term? Arizona Full Recovery Years?

71% say economy is getting worse Gallup Poll November 26, % getting worse November 26, 2010

29% say U.S. economy is now in a depression But..real GDP has recovered to prior peak before start of the recession Gross Domestic Product ($2005)

…mania of pessimism- John Paulson Objective Approach What are the numbers? Modern Approach How do you feel about the numbers?

Unemployment & Weak Job Growth Reduce Confidence Increase Pessimism

Meanwhile… Year-over-Year Arizona Job Growth Is (Slowly) Improving

Indicator Labor Force 3,171,0003,179,000 Unemployed 282,000307,000 Unemp. Rate 9.0%9.8% Jobs–12 Mos 44,700-15,000 Arizona Labor Market Improves Compare October 2011 vs October 2010 W. P. Carey School of Business & U. S. Bureau Labor Statistics

( Percentage Change 2010 vs 2009) 41 States Lost Jobs in 2010 Alaska 3 6 Hawaii 5 2 Lost Jobs (41) Added Jobs (9)

(Ranked by Percent Change Oct vs Oct. 2010) 45 States Now Adding Jobs Losing Jobs (5) Adding Jobs

Az IndustryRankNew Jobs Overall Az Jobs #7 44,700 Health Care #3 14,100 Construction #3 4,600 Trans./Warehouse #4 4,100 Manufacturing #9 4,700 Arizona Growth Rankings States Ranking by Percent Growth: Oct vs Oct W. P. Carey School of Business & U. S. Bureau Labor Statistics

Arizona Jobs Still Down by 300,000 And At Same Level as 2004 Peak 2.7 mil 2.4 mil

Metro AreaPercentJob Gains Houston3.1%79,500 Seattle2.3%37,700 Tampa2.2%24,100 San Diego2.0%24,000 Boston1.9%47,000 Pittsburgh1.9%21,800 Phoenix1.8%29,900 Best Metro Job Growth 2011 Job Gains – Oct vs Oct – Labor Force > 1 Million W. P. Carey School of Business & U. S. Bureau Labor Statistics

Realistically… Full Recovery is Years Away

U.S. Full Job Recovery Will Take Years 2001 Recession 1990 Recession Current Employment

After four years, Arizona jobs are still 10% below 2007 peak 4 More Years For Az Jobs Recovery

Assume: 2.5% job growth starting in back to peak in Months/8 Years To Return to Peak 4 More Years For Az Jobs Recovery

Economic Outlook: Slow (very slow) Growth

Personal Income (%) Employment (%) Retail Sales (%) Population (%) ARIZONA Economic Forecast W. P. Carey School of Business, ASU; based on data available as of Dec. 1, 2011 Major Arizona Risk – U.S. Economy

Arizona Jobs Growing Again Annual Numeric Change In Arizona Employment YTD Az Job Growth 0.8% Thru Oct. Forecast U.S. BLS & W. P. Carey School of Business

Annual Percent Change Arizona Dept. of Revenue & W. P. Carey School of Business Arizona Retail Sales Outlook: Consumers Still Cautious Forecast

U.S. Census Bureau & W. P. Carey School of Business Forecast Population Growth Below Average – For Arizona (Annual Percent Change)

U. S. Census Bureau and W. P. Carey School of Business Annual Average Migration to Arizona Slowed In Recession 97,492 42,553

Long Term Arizona Population Growth Projections Still Strong Thousands of New Residents Per Year U. S. Census Bureau and IHS Global Insight

Percent Families That Can Afford Median Priced Home National Association of Home Builders Silver Lining: Phoenix Housing Again More Affordable Than U.S.

Short Term Outlook Weak Plan Now For Arizona Long Term Recovery

(Ranked by Percent Change 2011 – 2015 Job Growth) Arizona Top Growth State: Source: IHS Global Insight

Educated work force Competitive tax structure Affordable energy, water, land Transportation infrastructure Strong national/global brand Quality Growth Depends on More Than Population Increases

The Paradox of Recovery RECESSION AND RECOVERY Recession CauseRecession Cure Too Much ConfidenceMore Confidence Too Much CreditMore Credit Too Much SpendingMore Spending