By Elliot D. Pollack & Co |
Editor’s note: Elliot Pollack is the premier economic forecaster for Arizona and has been spot n for the past 30 years. He predicted in 2009 that real estate would boom again as millennials would begin to move into the housing the same as every generation before. Today, the real estate market is fully recovered and Arizona, and Pinal County, is experiencing hyper-rapid job growth driving real estate values. Here is his latest report:
Economic data nationally focused on GDP forecasts, inflation, and retail sales. The consensus GDP forecast for 2021 and 2022 has been declining gradually over the past few months, with the latest forecast dipping below 6% for 2021 and forecasted 4.3% for 2022. But, keep in mind, average GDP growth over the last decade was 2.3% per year. These will still be very good outcomes for the U.S. economy, but the trend reflects a moderating perception on the magnitude of potential growth over the next two years.
High inflation also remains a concern. Thankfully, August saw a slowing of monthly inflation growth to a 6-month low thanks to a drop in motor vehicle prices, but still amounts to 5.2% year-over year (4.0% annual growth for core inflation). Most of the blame still points to disruptions in the supply chain and semiconductor shortages. These are very fixable issues. The Fed also appears to be mulling policy changes in the face of a continuing recovery and inflation concerns. There is little expectation that they will be raising rates anytime soon, but many expect them to taper their bond buying program starting closer to the end of the year.
Locally, we continued the trend of positive employment news with the August release of data. Arizona is now 97.1% recovered in total jobs and has fully recovered all private sector jobs. Greater Phoenix has now recovered all of the jobs lost from the pandemic recession, joining other regions around the state that recovered even more quickly such as Sierra Vista, Prescott, and Lake Havasu. The unemployment rate also declined with a combination of job gains and a slight decline in the labor force. Also, retail sales also dipped for the month of July but still substantially higher compared to the same month a year ago.
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