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U.S./Arizona/Phoenix Economic Outlook
Lee McPheters May 6, 2015
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The View from 30,000 Feet Two Cheers for 2014 GDP!
Consumers Remain Cautious U.S. & Arizona Jobs are Up 85% of New Jobs to Phoenix AZ Best Year of Recovery
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3% GDP Growth Still Elusive
GDP Components 2013 Growth 2014 U. S. GDP (Output) 2.2% 2.4% Consumer Spending 2.4 2.5 Gross Investment 4.9 5.8 Residential Construction 11.9 1.6 Non-Resid. Construction -0.5 8.2 Government Spending -2.0 -0.2 U. S. Bureau of Economic Analysis, GDP Accounts, April 29, 2015
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2015 GDP Off to A Slow Start GDP Components 2014 Growth 2015 Q1
U. S. GDP (Output) 2.4% 0.2% Consumer Spending 2.5 1.9 Gross Investment 5.8 2.0 Residential Construction 1.6 1.3 Non-Resid. Construction 8.2 -23.1 Government Spending -0.2 -0.8 U. S. Bureau of Economic Analysis, GDP Accounts, April 29, 2015
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U.S. Has Regained All Lost Jobs
Jan Peak (138,365,000) May 2014 Recovery Time Period: 7 yrs 5 mos Feb Bottom U. S. Bureau of Labor Statistics, Seasonally Adjusted
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Arizona Has Regained 78% of Lost Jobs 68,000 Jobs (22%) Still to Recover
Oct Peak (2,686,000) 245,000 Jobs Regained (78%) 313,000 Arizona Jobs Lost (12%) Sept Bottom U. S. Bureau of Labor Statistics, Seasonally Adjusted, Payroll Employment, March 2015
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March Job Growth: Arizona 14th
(AZ Jobs Up by 2.6% - 25 yr. Average is 3.9%) Top 10 Growth States 4 47 6 3 10 38 8 1 11 5 9 14 26 7 Ranked by % Change: March 2015 vs March 2014 12 2 U. S. Bureau of Labor Statistics 7
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Latest Arizona Job Rankings Ranked by Year/Year Growth: March 2015
Arizona Industry % Growth U.S. Rank Overall Job Growth 2.6 14 Other Services* 8.2 1 State Government 3.2 3 Financial Sector 3.6 6 Health Care 3.4 8 Retail Trade 9 Construction 1.5 27 U. S. Bureau Labor Statistics & W. P. Carey School of Business * Other Services includes Personal, Laundry, Repair Services
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99% of All New Jobs In Services
Arizona Industry New Jobs Share New Arizona Jobs 66,700 Professional/Biz Services 13,700 21% Health Care 11,000 17% Leisure/Hospitality 9,700 14% Retail Trade 8,000 12% Other (Personal) Services 7,200 11% Finance/Insurance 5,000 8% U. S. Bureau Labor Statistics, March 2015 vs March 2014
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New Arizona Jobs and Wages New Jobs Added March 2015 vs. March 2014
Arizona Industry New Jobs Avg. Wage* Private Job Growth 63,600 46,700 Health Care (+Social Assistance) 11,000 50,600 Retail Trade 8,000 30,200 Employment Services 5,100 31,500 Food Services 4,500 17,000 Finance/Insurance 5,000 63,800 Professional/Technical 4,700 77,100 U. S. Bureau Labor Statistics; Average Wages for 2014, estimated by W. P. Carey School of Business
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Arizona Ranked 18th in Personal
Income Growth Rate in 2014 7 1. Alaska 21 4 2 6 20 23 10 3 8 18 9 5 Emerging Problem: Arizona Ranked 41st in Per Capita Income in 2014 U. S. Bureau of Economic Analysis
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Real Incomes Falling For 10 Years U.S. Bureau of Economic Analysis
2001: $56,200 U.S. Arizona 2013: $50,600 U.S. Bureau of Economic Analysis
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Arizona Ranked 6th (1.5%) in
Population Growth in 2014 10 17 1 12 8 40 2 7 4 14 6 46 9 3 U. S. States Ranked by Percent Change 2014 5 U. S. Census Bureau, Dec. 2014
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Phoenix 3rd Among Metro Net Migration Destinations
(But Phoenix Gained 96,000 in 2006) Leading Metro Destinations: 2014 Houston (65,850) Denver (29,386) 2. Dallas (49,403) Tampa (28,372) Phoenix (41,127) San Antonio (24,818) Austin (33,059) 9. Charlotte (24,097) 5. Atlanta (32,294) 112. Tucson (861) U. S. Census Bureau, Domestic Migration, 2014
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GDP Below 3% Growth for 10th Year!
U.S. Economic Outlook GDP Below 3% Growth for 10th Year! Indicators 2013 2014 2015 Real GDP Growth 2.2% 2.4% 2.9% 10 Year Treasury Note 2.5% 2.3% Inflation (CPI) 1.5% 1.1% Employment (Jobs) 2.3 mil. 2.5 mil. 2.7 mil. Unemployment Rate 7.4% 6.2% 5.4% W. P. Carey School of Business, ASU & Blue Chip Economic Indicators
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ARIZONA Economic Outlook Indicators 2013 2014 2015
New Jobs (thousands) 57.1 47.8 65.0 Employment (%) 2.3 1.9 2.5 Personal Income (%) 2.1 4.1 4.5 Population (%) 1.2 1.5 1.7 W. P. Carey School of Business, ASU, based on data available May 2015
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Metro Phoenix Economic Outlook Indicators 2013 2014 2015
New Jobs (thousands) 51.2 41.5 55.0 Employment (%) 2.9 2.3 3.0 Unemployment (%) 6.7 6.0 4.6 Population (%) 1.7 1.9 2.0 W. P. Carey School of Business, ASU, based on data available May 2015
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Optimists Expect… Pessimists Expect…
More Business Service & Health Care Jobs In Arizona Population Growth Up, Wages Up, Construction Rebounds Home Values & Incomes Rise, Consumers Get Back in Game National Economic Growth Breaks out of 2% GDP Band Population Growth Remains Slow Compared to Past Years Too Many Lower Wage Jobs, Incomes Do Not Grow Home Building Stagnant as Rates & New Home Prices Rise Education Cuts, Image Issues Hurt Arizona Brand Long Term
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Current Arizona Consensus 2015 Likely Best Year Since Recession Ended
better than most states – but still below long term average growth rates Population increase is a key driver Construction is the missing catalyst Job quality greatest long term risk U.S. economy greatest short term risk
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U.S./Arizona/Phoenix Economic Outlook
Lee McPheters May 6, 2015
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