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Comerica Bank’s Arizona Index Ticks Up

January 31, 2017
By Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s Arizona Economic Activity Index rose 0.1percent in September to a level of 110.9. September’s indexreading is 11 points, or 11 percent, above the indexcyclical low of 99.5. The index averaged 110.0 points for allof 2016, one and one-tenth point above the average for2015. August’s index reading was 110.8.

The Comerica Bank Arizona Economic Activity Index forSeptember ticked up by 0.1 percent after revised datashowed essentially no change for August. The Arizonastate index has remained range bound since last May. Arizona’smonthly nonfarm payrolls data has been volatilethis year, posting losses in four out of 10 months. Lookingthrough the noisy monthly data, it appears that the paceof Arizona payroll growth is moderating. Year to date, Arizonahas added a net 27,100 jobs as of October. This isabout half the pace of 2016 and 2015. The September Arizonasub-index values were mostly positive. Six out of ninesub-indexes were positive, including nonfarm payrolls, unemploymentinsurance claims (inverted), housing starts,house prices, industrial electricity demand and state salestax revenues. The two negative sub-indexes were totalstate trade and enplanements. The hotel occupancy subindexwas unchanged for the month. The Arizona economystill has some room to run in this cycle. Recent gains inthe state’s labor market have been enough to pull Arizona’sunemployment rate down to 4.5 percent in October.Tighter labor markets, along with the increase in Arizona’sminimum wage from $10.00 per hour to $10.50 per hour,effective in January, will help to boost incomes in 2018.Higher incomes, along with climbing home prices, will supportstate household spending through 2018.

For a PDF version of this report click here: AZ_Index_1117

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