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U.S./Arizona/Phoenix
Economic Outlook
Lee McPheters
May 6, 2015
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 2015 - Best Year of Recovery
3% GDP Growth Still Elusive
2013
Growth
2.2%
2014
Growth
2.4%
2.4
2.5
4.9
5.8
Residential Construction
11.9
1.6
Non-Resid. Construction
-0.5
8.2
-2.0
-0.2
GDP Components
U. S. GDP (Output)
Consumer Spending
Gross Investment
Government Spending
U. S. Bureau of Economic Analysis, GDP Accounts, April 29, 2015
2015 GDP Off to A Slow Start
2014
Growth
2.4%
2015
Q1
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
-0.2
-0.8
GDP Components
U. S. GDP (Output)
Government Spending
U. S. Bureau of Economic Analysis, GDP Accounts, April 29, 2015
U.S. Has Regained All Lost Jobs
Jan. 2008 Peak (138,365,000)
May 2014 Recovery
Time Period: 7 yrs 5 mos
Feb. 2010 Bottom
U. S. Bureau of Labor Statistics, Seasonally Adjusted
Arizona Has Regained 78% of Lost Jobs
68,000 Jobs (22%) Still to Recover
Oct. 2007 Peak (2,686,000)
245,000 Jobs
Regained (78%)
313,000 Arizona
Jobs Lost (12%)
Sept. 2010 Bottom
U. S. Bureau of Labor Statistics, Seasonally Adjusted, Payroll Employment, March 2015
March Job Growth: Arizona
th
14
(AZ Jobs Up by 2.6% - 25 yr. Average is 3.9%)
Top 10 Growth States
4
47
3
6
10
38
8
5
1
14
11
9
26
7
Ranked by % Change:
March 2015 vs March 2014
12
2
U. S. Bureau of Labor Statistics
Latest Arizona Job Rankings
Ranked by Year/Year Growth: March 2015
Arizona Industry
Overall Job Growth
Other Services*
State Government
Financial Sector
Health Care
Retail Trade
Construction
% Growth
U.S. Rank
2.6
8.2
3.2
3.6
3.4
2.6
1.5
14
1
3
6
8
9
27
U. S. Bureau Labor Statistics & W. P. Carey School of Business
* Other Services includes Personal, Laundry, Repair Services
99% of All New Jobs In Services
Arizona Industry
New Arizona Jobs
Professional/Biz Services
Health Care
Leisure/Hospitality
Retail Trade
Other (Personal) Services
Finance/Insurance
New Jobs
Share
66,700
13,700
11,000
9,700
8,000
7,200
5,000
21%
17%
14%
12%
11%
8%
U. S. Bureau Labor Statistics, March 2015 vs March 2014
New Arizona Jobs and Wages
New Jobs Added March 2015 vs. March 2014
Arizona Industry
Private Job Growth
Health Care (+Social Assistance)
Retail Trade
Employment Services
Food Services
Finance/Insurance
Professional/Technical
New Jobs Avg. Wage*
63,600
11,000
8,000
5,100
4,500
5,000
4,700
46,700
50,600
30,200
31,500
17,000
63,800
77,100
U. S. Bureau Labor Statistics; Average Wages for 2014, estimated by
W. P. Carey School of Business
th
18
Arizona Ranked
in Personal
Income Growth Rate in 2014
7
1. Alaska
2
6
23
8
4
21
20
10
18
3
9
Emerging Problem:
Arizona Ranked 41st in
Per Capita Income in 2014
U. S. Bureau of Economic Analysis
5
Real Incomes Falling For 10 Years
2001: $56,200
U.S.
Arizona
2013: $50,600
U.S. Bureau of Economic Analysis
th
6 (1.5%)
Arizona Ranked
in
Population Growth in 2014
10
12
1
17
8
40
2
7
14
6
4
9
46
U. S. States Ranked by
Percent Change 2014
U. S. Census Bureau, Dec. 2014
3
5
rd
3
Phoenix
Among Metro
Net Migration Destinations
(But Phoenix Gained 96,000 in 2006)
Leading Metro Destinations: 2014
1. Houston (65,850)
6. Denver (29,386)
2. Dallas (49,403)
7. Tampa (28,372)
3. Phoenix (41,127)
8. San Antonio (24,818)
4. Austin (33,059)
9. Charlotte (24,097)
5. Atlanta (32,294)
112. Tucson (861)
U. S. Census Bureau, Domestic Migration, 2014
U.S. Economic Outlook
GDP Below 3% Growth for 10th Year!
Indicators
2013
2014
2015
2.2%
2.4%
2.9%
Real GDP Growth
2.4%
2.5%
2.3%
10 Year Treasury Note
1.5%
1.5%
1.1%
Inflation (CPI)
2.3 mil. 2.5 mil. 2.7 mil.
Employment (Jobs)
Unemployment Rate
7.4%
6.2%
5.4%
W. P. Carey School of Business, ASU & Blue Chip Economic Indicators
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
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
Optimists Expect…
Pessimists Expect…
More Business Service &
Health Care Jobs In Arizona
Population Growth Remains
Slow Compared to Past Years
Population Growth Up, Wages
Up, Construction Rebounds
Too Many Lower Wage Jobs,
Incomes Do Not Grow
Home Values & Incomes Rise,
Consumers Get Back in Game
Home Building Stagnant as
Rates & New Home Prices Rise
National Economic Growth
Breaks out of 2% GDP Band
Education Cuts, Image Issues
Hurt Arizona Brand Long Term
Current Arizona Consensus
2015 Likely Best Year Since Recession Ended
•
•
•
•
•
2015 - 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
U.S./Arizona/Phoenix
Economic Outlook
Lee McPheters
May 6, 2015