Arizona Sees a Boost to Tourism and Home Sales

January 18th, 2016
The Monday Morning Quarterback 
A quick analysis of important economic data released over the last week
The U.S. economy continues to plug along. January’s employment may not be as strong as December’s, but consumer optimism regarding the job market is still strong. Medicare and Social Security costs continue to push the budget deficit higher. Falling gasoline prices are affecting a number of indicators. Consumer confidence is higher, though nobody seems happy about the recent stock market volatility. 
Foreclosures continue to decline nationally, enough so for CoreLogic’s chief economist to call the improvement “remarkable”. They report that 30 states now have foreclosure inventory rates below the national average, including Arizona.
Arizona continues to see increased airport traffic to boost the state’s tourism industry. Additionally, home sales and pricing are on the rise.
U.S. Snapshot:
  • Initial weekly unemployment insurance claims actually grew. This week resulted in 7,000 more claims from the previous week to a level not seen since last July but still represents a significant 6.6% decline from one year ago.  This suggests that the January employment report is likely to be less strong compared to December.
  • The U.S. government’s budget deficit continues to rise. Medicare and Social Security expenses led the reason for the increase. Compared to the same time last year, the deficit is up by a considerable 22.0%. Receipts are also 3.5% higher than the same period last year, mostly due to increases in individual income taxes (up 4.1%).
  • The U.S. monetary base reported a decline in December, down 2.5% from a year ago and 4.3% below the month prior.
  • Industrial production declined in December by 0.4% compared to the month prior after a decline of 0.9% in November. Cutbacks for utilities and mining are the primary causes for this result.  Production now stands 1.8% below a year ago.
  • Capacity utilization declined in December to 76.5% and now stands 3.2% below a year ago and 3.6% below its long-run (1972-2014) average.  The current level is below the level that historically been associated with significant increases in business plant and equipment spending. (see chart below)
  • The Producer Price Index for final demand goods decreased 0.7% in December, the sixth consecutive decrease. Over 75% of the December decline can be traced to prices for final demand energy (down 3.4%).  About half of the December drop in the index for final demand goods is attributable to prices for gasoline, which fell 8.3%.
  • The latest University of Michigan consumer sentiment index shows an increase of 7 tenths from the final December reading. There is short term pessimism due to the volatile stock market and conditions in China. However, future expectations are positive, backed by strength in the jobs market and falling oil prices.
  • Retail sales were down 0.1% in December compared to a month ago but are up 2.2% over a year ago.
  • The manufacturing inventories/sales ratio was unchanged at 1.38 in November. The ratio has increased by 4.5% compared to the same time last year.  Sales are down 0.2% from a month ago and down 2.8% from a year ago. Inventories are similarly down by 0.2% but up 1.6% from a year ago.
  • Gasoline prices average $2.104 for the second week in January. This is down 1.9% from a month ago and 5.7% from a year ago.
  • 33,000 foreclosures were completed in November which represents an 18.8% decline from a year ago. For reference, prior to the housing market crash, completed foreclosures averaged 21,000 per month (between 2000 and 2006). There were an estimated 448,000 homes in the U.S. in some stage of foreclosure, a decrease of 21.8% from last year. Foreclosure inventory now represents 1.2% of all homes with a mortgage.

Arizona Snapshot:    
  • Arizona unemployment claims came in at just over 28,000 for the week of January 9th. This is up on a week over week basis but, overall, down by 8.2% from a year ago.
  • Both enplanements and deplanements at Sky Harbor were up in November.  Enplanements were up 4.5% from a year ago and deplanements were up 3.5%.  This is good news for tourism.
  • The Greater Phoenix single family market showed a significant month over month increase in sales for the month of December, jumping 27.1%.  This is also 5.4% higher than sales activity over the previous year. 
  • The median single family home sales price in December was reported at just over $230,000 which is an increase of 8.0% from last year and an increase of 2.7% from just one month ago.
  • Total residential listings are down 8.0% from a year ago and were reported at just over 23,000 listings for the month of December. At the current pace of sales, this represents a 3.4 month supply of homes.
About EDPCo
Elliott D. Pollack & Company (EDPCo) offers a broad range of economic and real estate consulting services backed by one of the most comprehensive databases found in the nation. This information makes it possible for the firm to conduct economic forecasting, develop economic impact studies and prepare demographic analyses and forecasts. Econometric modeling and economic development analysis and planning are also part of our capabilities. EDPCo staff includes professionals with backgrounds in economics, urban planning, financial analysis, real estate development and government. These professionals serve a broad client base of both public and private sector entities that range from school districts and utility companies to law firms and real estate developers.  
For more information, contact –
Elliott D. Pollack & company
7505 East Sixth Avenue, Suite 100
Scottsdale, Arizona 85251


If you want to learn about some financing options, or if you’re looking to get pre-qualified, contact Parker Turk at Sun American Mortgage Company: 602-616-3774.




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