JUNE 2023
Greater Phoenix Overview
As a state, Arizona’s economy has a positive outlook for continued growth post-COVID. Greater Phoenix has had an increase in labor force, increase in employment rates, decrease in unemployment rates, increase in earnings, increase in nonfarm payroll jobs and an increase in the average hourly earnings compared to the previous 12 months. A mild recession is anticipated for the overall US economy which will translate to a slower paced growth for the Greater Phoenix region and the state in the near-term future.
Consumer Spending
Prices in Greater Phoenix increased 1.5% for the two months ending in April 2023. Over the last 12 months, the Consumer Price Index for all Urban Consumers (CPI-U) jumped 7.4%. Food prices increased 6.8%. Energy prices rose 2.9%, largely the result of an increase in the price of gasoline. The index for all other items less food and energy rose 8.1% over the year.
Disposable Income
Arizona’s annual per capita disposable personal income is currently $48,732; a 31% increase from 2016 when personal disposable income was $37,199. Despite this growth, increase in disposable income is still lagging the record high inflation rates.
Housing Sector
The House Price Index percentage change for the Greater Phoenix region from April 2022 is at -6.14%; despite the region experiencing a cooling housing market resulting from an increase in interest rates, there has been a slight increase for the third consecutive month in home prices since February 2023.
Inflation
The Inflation rate has been declining for the eleventh month in a row, following an all time high in June 2022. Despite this trend, there are still high interest rates, implying a tighter monetary policy, which is likely contributing to slower economic growth in Arizona and the nation.
ECONOMIC SNAPSHOT
Economic Activity
National, State & Greater Phoenix Economy
• Greater Phoenix real GDP in 2021 was $261.7 billion, expanding by 6.9% over the previous year
• Arizona real GDP grew 6.3% from 2020 to 2021
• U.S. real GDP grew 5.9% from 2020 to 2021
• Most recent estimates of GDP show an annual growth rate of 2.0% in Q1 2023 nationally, a positive outlook and slower growth for the economy compared to a 2.6% increase in Q4 2022.
Source: Bureau of Economic Analysis June 2023
ECONOMIC SNAPSHOT $0 $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 $100,000 $125,000 $150,000 $175,000 $200,000 $225,000 $250,000 $275,000 $300,000 $325,000 $350,000 $375,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Real GDP (Millions of Chained 2012 Dollars) Real GDP Phoenix MSA Arizona United States
Wage Growth
• In Greater Phoenix and Arizona, overall real personal income grew faster than the national average from 2020 to 2021
Real Personal Income (millions of constant 2012 dollars)
• The percentage growth in real per capita personal income from 2020 to 2021 in Greater Phoenix was significantly higher than the national average
Real Per Capita Personal Income (constant 2012 dollars)
Source: Bureau of Economic Analysis January 2023
2020 2021 % Growth Greater Phoenix 234,587 252,473 7.6% Arizona 341,319 362,114 6.1% United States 17,825,584 18,412,541 3.3%
2020 2021 % Growth Greater Phoenix 48,190 51,045 5.9% Arizona 47,551 49,766 4.7% United States 53,772 55,477 3.2%
ECONOMIC SNAPSHOT
Greater Phoenix Employment
Greater Phoenix’s pre-COVID peak was in December 2019 at 2,255,700 jobs
There has been a steady increase in the number of jobs in the metro
Current total nonfarm payroll employment is 2,353,700 jobs; unemployment rate is 3.3%
Greater Phoenix Job Growth
Source AZ Office of Economic Opportunity Labor Statistics, June 2023, not seasonally adjusted, preliminary numbers
ECONOMIC SNAPSHOT
1600.0 1700.0 1800.0 1900.0 2000.0 2100.0 2200.0 2300.0 2400.0 2500.0 May-14 May-15 May-16 May-17 May-18 May-19 May-20 May-21 May-22 May-23
Current Makeup of Industry
• The largest industries in Greater Phoenix are professional and business services and healthcare and social assistance
• Since the 2008 recession, the most significant changes are a relative growth in healthcare and social assistance and a decline in construction and retail trade
Source: AZ Office of Economic Opportunity Labor Statistics, June 2023, not seasonally adjusted, preliminary numbers
Current Employment Diversity
ECONOMIC SNAPSHOT Health Care and Social Assistance, 13% Retail Trade, 10% Government, 11% Leisure and Hospitality, 10% Finance and Insurance, 7% Manufacturing, 6% Construction, 7% Transportation and Utilities, 5% Wholesale Trade, 4% Other Services, 3% Real Estate, Rental, and Leasing, 2% Information, 2% Professional and Business Services, 17% Educational Services, 3%
Drivers of Growth
• The top four occupations that had the fastest recent employment growth were Restaurant Cooks , Industrial Truck and Tractor Operators, Home Health and Personal Care Aides and Electricians.
• Home Health and Personal Care Aides, Laborers and Freight, Stock, and Material Movers, Fast Food and Counter Workers and General and Operations Managers had the highest increase in the number of jobs between 2022 and 2023.
Greater Phoenix Fastest-Growing Occupations
Source: Lightcast 2023 Q2 Dataset, May 2023
ECONOMIC SNAPSHOT Description 2022 Jobs 2023 Jobs 2022 - 2023 Change 2022 – 2023 % Change Cooks, Restaurant 21,393 22,742 1,348 6% Industrial Truck and Tractor Operators 15,580 16,429 849 5% Home Health and Personal Care Aides 56,660 59,420 2,760 5% Electricians 12,723 13,331 607 5% Software Developers 29,256 30,569 1,313 4% Medical Assistants 15,181 15,854 673 4% Market Research Analysts and Marketing Specialists 13,504 14,065 560 4% Fast Food and Counter Workers 39,318 40,870 1,552 4% First-Line Supervisors of Food Preparation and Serving Workers 17,731 18,424 693 4% Light Truck Drivers 15,217 15,769 551 4% Laborers and Freight, Stock, and Material Movers, Hand 52,038 53,920 1,882 4% Construction Laborers 18,510 19,167 657 4% Waiters and Waitresses 36,481 37,752 1,271 3% Miscellaneous Assemblers and Fabricators 15,849 16,361 513 3% Accountants and Auditors 19,272 19,863 590 3% Stockers and Order Fillers 39,803 40,985 1,182 3% Heavy and Tractor-Trailer Truck Drivers 30,159 31,053 894 3% Receptionists and Information Clerks 17,949 18,478 529 3% Maintenance and Repair Workers, General 24,913 25,580 666 3% General and Operations Managers 58,782 60,322 1,540 3%
Job Forecast
Greater Phoenix job growth is projected to be 1.66% from 2023 to 2024
Arizona job growth is projected to be 1.48% from 2023 to 2024
Projected Non Farm Employment Growth
Greater Phoenix recovered all job loss caused by COVID-19 in 2021
Source: University of Arizona Economic and Business Research Center, June 2023
ECONOMIC SNAPSHOT 0.0 500.0 1,000.0 1,500.0 2,000.0 2,500.0 3,000.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Inflation and Prices (National)
• Inflation reflects the annual percentage change in the cost to an average consumer of acquiring a standard market basket of goods and services. The inflation rate presented below is the year-over-year percentage change which is a measure of the average monthly change in the overall price for goods and services paid by urban consumers
• The most recent inflation rate was 4.0% which is a decrease for the eleventh consecutive month since June 2022. However, rates remain above the long-term average
Inflation Rates - U.S
Source: Bureau of Labor Statistics, June 2023.
ECONOMIC SNAPSHOT -2 0 2 4 6 8 10 5/1/2014 5/1/2015 5/1/2016 5/1/2017 5/1/2018 5/1/2019 5/1/2020 5/1/2021 5/1/2022 5/1/2023
Business Confidence Index (National)
• The Business Confidence Index measures how businesses perceive the economy based on surveys measuring developments in production, orders and stocks of finished goods. Numbers above 100 indicate confidence in future business performance
• The index measured at 98.91 in May, indicating slight pessimism towards economic activity in the future
June
ECONOMIC SNAPSHOT 96.00 97.00 98.00 99.00 100.00 101.00 102.00 103.00 May-14 May-15 May-16 May-17 May-18 May-19 May-20 May-21 May-22 May-23
Source: OECD,
2023
Business Confidence Index
Regional Comparisons
• Greater Phoenix has a lower unemployment rate than Arizona and the United States
• Employment rates have a consistent trend at the metro, state and national level Unemployment Rates
Nonfarm Employment
Source: AZ Office of Economic Opportunity Labor Statistics, June 2023, not seasonally adjusted, preliminary numbers All US Data- BLS, June 2023 ECONOMIC SNAPSHOT 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 May-21 Jul-21 Sep-21 Nov-21 Jan-22 Mar-22 May-22 Jul-22 Sep-22 Nov-22 Jan-23 Mar-23 May-23 Unemployment Rates US AZ PHX MSA 0.0 500.0 1,000.0 1,500.0 2,000.0 2,500.0 3,000.0 3,500.0 May-21 Jul-21 Sep-21 Nov-21 Jan-22 Mar-22 May-22 Jul-22 Sep-22 Nov-22 Jan-23 Mar-23 May-23 Local and State Employment (000) AZ PHX MSA 110000 120000 130000 140000 150000 160000 May-21 Jul-21 Sep-21 Nov-21 Jan-22 Mar-22 May-22 Jul-22 Sep-22 Nov-22 Jan-23 Mar-23 May-23 US Employment (000) US
Households
Cost of Living
The overall cost of living in Greater Phoenix is 3.8% above the national average.
Cost of Living Comparison for Select Markets
Source: C2ER Cost of Living Index 2023 Q1
ECONOMIC SNAPSHOT Region 100% Composite Index 15.73% Grocery items 28.10% Housing 9.06% Utilities 8.53% Transportation 4.83% Healthcare 33.75% Misc. Goods and Services Albuquerque NM 93.8 97.9 85.2 99.1 90.1 94.0 98.6 Houston TX 93.9 99.3 83.0 103.8 90.6 91.3 99.1 Austin TX 101.2 96.9 115.2 96.1 90.1 99.4 96.1 Dallas TX 103.0 102.0 95.9 112.0 89.5 110.3 109.3 Phoenix AZ 103.8 103.1 122.7 98.8 102.8 92.2 91.5 Salt Lake City UT 106.5 99.8 117.8 92.8 104.2 93.1 106.5 Denver CO 111.9 104.9 134.7 86.5 107.5 100.5 105.8 Portland OR 120.7 108.9 152.6 93.5 122.8 107.6 108.2 Arlington VA 140.1 116.9 218.0 99.4 102.2 113.3 110.4 San Diego CA 142.5 115.0 215.6 105.4 130.0 105.9 112.7 Seattle WA 144.5 117.0 210.1 102.0 125.6 134.5 120.2 Boston MA 148.4 105.0 219.5 126.1 127.5 112.6 125.8 Los Angeles CA 149.1 111.6 235.2 112.7 121.9 109.5 117.2 San Francisco CA 169.9 127.8 286.6 132.3 131.5 123.5 118.9 New York (Manhattan) NY 222.0 116.3 480.2 100.6 119.7 113.5 130.2
Consumer Sentiment (National)
• Consumer sentiment remains at or near its lowest level in the past decade
• Index is at 59.2 for the month of May
Source: University of Michigan, June 2023 ECONOMIC SNAPSHOT 0.0 20.0 40.0 60.0 80.0 100.0 120.0 May-19 Aug-19 Nov-19 Feb-20 May-20 Aug-20 Nov-20 Feb-21 May-21 Aug-21 Nov-21 Feb-22 May-22 Aug-22 Nov-22 Feb-23 May-23
Consumer Sentiment
Housing Sector
Housing Market Trends
• Home prices in Greater Phoenix increased for over a decade with the month of June recording the highest index at 343.56 with an annual percentage change of 26.56%
• Despite the housing market cooling off, there has been a slight uptick in home prices since February. The YoY change is at -6.14% for the month of April.
*An index value of 100 equals the home price in January 2000.
Source: S&P/Case-Shiller Home Price Index, June 2023
ECONOMIC SNAPSHOT 100.00 150.00 200.00 250.00 300.00 350.00 400.00 Apr-14 Apr-15 Apr-16 Apr-17 Apr-18 Apr-19 Apr-20 Apr-21 Apr-22 Apr-23
Greater Phoenix Home Price Index
