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Arizona/Phoenix/Western States Update & Outlook
ASU/JPMorgan Chase 54th Annual Economic Forecast Luncheon
November 29, 2017
Lee.McPheters@asu.edu
Arizona Ranks 13th in Non-Farm Job Creation Year-To-Date 2017
Ranked by % Change: (January – Oct. 2017)
10
4 34
5
8
2
13
9
Top 10 Growth States 6
17
3
7
14 1
Losing Jobs
U. S. Bureau of Labor Statistics & W. P. Cary School of Business
50
Arizona Industry % Change U.S. Rank Non-Farm Employment 1.8 13 Food Services 6.5 1 Financial Activities 4.0 1 Health Care 3.0 5 Construction 2.4 27 Manufacturing 2.1 9 Trucking 2.0 7
Food Service & Financial Job Growth Gains Best in the U.S.
U. S. Bureau of Labor Statistics & W. P. Carey School of Business, Year -to-Date October 2017
Oct Nov Dec Jan Feb Mar April May June July Aug Sept Oct
65.5
53.1 56.2 57.3 55.4 54.1 48.8 48.7
60.4
43.6 39.7 37.5
32.0
Thousands of New Jobs Year-Over-Year
U. S. Bureau of Labor Statistics
Slowest Growth Since The Expansion Began: Permanent Dip or Blip?
But Arizona Job Growth Has Slowed During the Second Half of 2017
2011 2012 2013 2014 2015 2016 2017 2018
26,000
51,300 57,100
49,800
65,600 68,100
49,000
61,000
Arizona To Add 61,000 Jobs in 2018 Annual Job Creation
U. S. Bureau of Labor Statistics & W. P. Carey School of Business, November 29, 2017
Forecast
Unemployment in Western States (Seasonally Adjusted Unemployment Rates, October 2017)
3.3 5.0
2.7
6.1
4.3
3.9
4.2
4.9
4.5
2.9 3.9
4.5
U. S. Bureau of Labor Statistics
Among Ten Lowest
Unemployment Notes • Arizona’s 4.5 % unemployment
rate lowest in 10 years (Dec ‘07) • Colorado has 3rd lowest rate, Idaho 6th, Utah 10th
• New Mexico’s unemployment is the second highest in the nation, behind Alaska (7.2%)
• Arizona unemployment rate is projected to average 4.3% in 2018
2 1
4
10
Arizona Ranked 8th Fastest in Population Growth in 2016
U. S. States Ranked by Percent Change 2016
8
U. S. Census Bureau, Dec. 2016
9
7
5
3 13
19
6
41
Top 10 Growth States Lost Population
2
3
5
1
8
10
9
6
7
Arizona Ranks Among Top Five States for Domestic In-Migration
4 Alaska Hawaii
U.S. Census Bureau, Dec. 2016
31 States in Red Lost Domestic Population to 19 States in Green
Arizona & West Draw College Grads
IPUMS Data – University of Minnesota
Net Migration of College Educated under 40
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
1.0 1.0 0.9
1.3 1.1
1.4 1.5 1.7 1.6
1.7
Forecast U.S. Census Bureau & W. P. Carey School of Business, November 29, 2017
Arizona 2018 Population Growth Will Yield 120,000 New Residents
Annual Average 1977 – 2007 = 3.2%
Percent Change
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
80,804
55,633
37,666
19,153 12,826
10,755 10,306 16,189
18,386 16,841 22,311 24,853
28,332 32,580
4th Year of Home Building Gains 15% Arizona Rise Expected in 2018
Forecast
Arizona Single Family Permits
U.S. Census Bureau & W. P. Carey School of Business, November 29, 2017
Arizona U.S.
Arizona Home Ownership Rate Has Declined from Pre-Recession Peak
U.S. Census Bureau
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
10,868
5,876
674 1,088 1,784
4,036 5,778
8,784
5,781
10,150
7,645 6,883
Multi-Family Permits to Dip in 2018
Forecast
Greater Phoenix Multi-Family Permits
U.S. Census Bureau & W. P. Carey School of Business, November 29, 2017
Phoenix Indicators 2016 2017 2018 Employment (thousands) 1,973 2,024 2,081 Employment Growth (% change) 3.1 2.5 2.8 New Jobs (thousands) 60.1 51.0 57.0 Population (% change) 2.1 2.0 2.2 Single Family Permits (thousands) 18.4 21.5 24.5
Greater Phoenix Outlook
W. P. Carey School of Business, November 29, 2017
Arizona Indicators 2016 2017 2018 New Jobs (thousands) 68.1 49.0 61.0 Employment (% change) 2.6 1.8 2.2 Unemployment Rate (December) 5.0 4.5 4.2 Population (% change) 1.7 1.6 1.7 Single Family Permits (% change) 11.4 14.0 15.0
Arizona Economic Outlook Greatest Risk is National Economy
W. P. Carey School of Business, November 29, 2017
Potential Threats & Headwinds To U.S. Economic Growth
• Fed Makes “Policy Mistake” • Congress Makes “Policy Mistake” • Productivity Weakens • Korean, Other International Crisis • Tax Cut Fails, Consumer Confidence Craters, Markets Contract
Arizona unemployment rate is at 10 year low.
Key industries are strong and growing: Finance, Manufacturing, Construction, and services such as Health Care and Food Services
But growth rates for past 5 years indicate a slower, sustainable “New Normal” for Arizona and Phoenix
Population, start ups, and cost structure will drive growth in 2018 – U.S. business cycle is greatest risk
Arizona Economic Outlook Summary-2018