1. U.S./Arizona/Phoenix Economic Outlook
Lee McPheters
May 6, 2015

2. 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

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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

13. 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

14. 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

15. 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

16. 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

17. 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

18. 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

19. 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

20. U.S./Arizona/Phoenix Economic Outlook
Lee McPheters
May 6, 2015