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Comerica Bank’s Arizona Economic Activity Index increased by 0.2 percentage points in August to a level of 112.7.

Comerica Bank's Arizona Index Inches Up

October 31, 2018
By Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s Arizona Economic Activity Index increased by 0.2 percentage points in August to a level of 112.7. August’s index reading is 13 points, or 13 percent, above the index cyclical low of 99.5. The index averaged 111.1 points for all of 2017, one point above the average for 2016. The July index reading was 112.5.

The Comerica Bank Arizona Economic Activity Index inched up in August after breaking a string of five consecutive monthly gains in July. Seven out of nine sub-indexes were positive in August. They were nonfarm employment, unemployment insurance claims (inverted), housing starts, house prices, total state trade, hotel occupancy, and state sales tax revenue. The two negative components were industrial electricity demand and enplanements. Arizona job growth continued to accelerate through September, with the labor market looking stronger in 2018 than it did in 2017. Through the first nine months of the year, 9,050 jobs per month have been added, on average. However, the state unemployment rate has remained largely unchanged at 4.7 percent in September, which is still well above the state’s low of 3.6 percent from mid-2007. Of note, the Tucson metro area, which has traditionally trailed growth in Phoenix, has now regained all the jobs it lost during the recession between 2007 and 2011. Meanwhile, the resolution of the U.S.-Mexico-Canada Trade Agreement, which remains to be ratified by each country, removes some uncertainty for Arizona businesses. Mexico and Canada are the state’s two largest trade partners, accounting for 36 percent and 10 percent of its export purchases, respectively.

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