J U L Y 2 0 0 4 WHAT SHOULD WE WORRY ABOUT NOW? By Marshall J. Vest Forecasting Project Director June 1, 2004 H ow quickly perceptions change. Last quarter, there still were a large number of doubters about the U.S. economy’s progress, particularly about the lack of or slow employment growth. Today, focus has shifted to inflation and higher interest rates, and whether the economy can sustain recent rapid growth. Can consumers continue to spend? What about the federal deficit? Oil prices? The quagmire in Iraq? There never seems to be too little to worry about— news outlets make sure of that. The reality is that neither higher short-term interest rates nor expiring tax cuts nor a dip in consumer spending are about to derail what has turned into a strong cyclical upturn. The economy has ample room to grow before any of these worries become restrictive. It may be too soon to use the word “boom,” but a number of measures may soon be signaling just that. In keeping with tradition, Arizona’s economy is among the pace setters. The U.S. economy is now growing rapidly. Real GDP is expanding at a 4-5% annual rate, unemployment is falling, businesses are investing in new equipment, and employment S U M M E R I S S U E is increasing. More EXHIBIT 1 than one million jobs Disinflation Has Come to an End have been created over Consumer Core Price Inflation (less food and energy) the past eight months, and many are good, high-paying jobs. Forget about global outsourcing. It’s too small to be a factor. The U.S. economy creates as many new jobs in a single month as the cumulative loss to global outsourcing over the past three years. Plus, the U.S. adds several times more jobs through “insourcing,” i.e., foreign-owned company hiring of U. S. workers at their U.S. facilities. The resumption of growth has brought major changes in leveling off or receding, and futures markets direction for both inflation and federal indicate lower prices in coming months. policy. First, consider inflation. Perhaps the Core inflation, which excludes volatile food most defining macroeconomic feature of the and energy components, moved up at a 2.6% past twenty-five years is the downward trend annual rate from February through April, but of inflation. “Trend disinflation” has now is only 1.8% higher than one year earlier. come to an end, and prices will move higher Given plenty of excess capacity in many going forward. Even Wal-Mart executives industries—strong productivity gains and recently stated that the period of declining wage gains running at a contained 3.7% prices is over! Accelerating growth has annual pace—a cost-push price spiral is not brought higher prices across many sectors, in the making. According to Global Insight, including hotels, airlines, apparel, the worldwide leader in economic commodities, and the volatile food and forecasting, core inflation should remain energy sectors. Some price increases are around 2% through 2006 (Exhibit 1). quite large. For example, lumber prices are The second major macroeconomic change double what they were one year ago. relates to federal fiscal and monetary However, recent spikes are now either policies. Both turned very stimulative three I N S I D E ARIZONA'S ECONOMY: A Pace Setter FORECAST TABLES ................4 ECONOMIC INDICATORS ........5 ELLER COLLEGE OF MANAGEMENT T UCSON, ARIZONA EXHIBIT 2 Historically Low Taxes Will Rise EXHIBIT 3 Short Term Interest Rates Will Rise Effective Federal Personal Income Tax Rate Real Interest Rates (Fed Funds rate less core inflation) years ago, which prevented what could have been a severe recession. With the economy now growing smartly, both must retract excess stimulus. With effective federal personal taxes running at a decades-low at 17.0%, out-sized budget deficits, and looming crises in Social Security and Medicare, taxes will increase. This will be accomplished little-by-little through expiration of some currently enacted tax cuts such as the bonus depreciation for capital equipment purchases, the growing numbers of taxpayers who are subject to the Alternative Minimum Tax, and other minor tinkering. There may even be substantial and broad-based tax hikes ahead, despite promises of our U.S. presidential candidates. Global Insight expects personal taxes to move back toward their historical average of 21% by the end of the decade (Exhibit 2). Government spending will continue to rise, but at a slower pace than in the recent past, which will allow the deficit to narrow. Regarding monetary policy, bond investors already have boosted longer-term interest rates up nearly a full percentage point since the year began. Meanwhile, the Federal Reserve has kept its main policy instrument, the Fed Funds rate, at a four-decade low of only 1.0% for nearly a full year. That has resulted in a very steep treasury yield curve. Moreover, real short term interest rates are negative, and the last time that happened was some thirty years ago (Exhibit 3). PAGE 2 Real short term interest rates could rise three full percentage points before getting back to “neutral” levels typically found during a period of self-sustaining expansion. This will not derail the economy, but the Fed must do this carefully to keep from spooking the bond market. Expect a gradual rise of 200-300 basis points by the end of 2005. THE ECONOMY HAS ENTERED A PERIOD OF RAPID GROWTH. BOTH 2004 AND 2005 PROMISE TO BRING THE FASTEST GROWTH IN A DECADE. THE AMAZING CONSUMER The past recession was the first on record that didn’t see a consumer retrenchment. Real consumer spending continued to grow throughout, and has been moving up for thirteen consecutive years. How did this happen? Households with net worth less than $1 million (94% of all households) experienced an increase in net worth over the 1999 to 2003 period. That’s due to the increase in housing values, which accounts for a large portion of these households’ wealth. Existing home prices increased by nearly 8.0% nationwide last year. In Arizona, existing home prices increased by 7.4% overall with Phoenix at 6.4%, Tucson at 8.7%, and Flagstaff at 10.8% (according to a “constant quality” repeat sales index from the Office of Federal Housing Enterprise Oversight). As the stock market roared back last year, net worth increased for all households by an inflation-adjusted 3%. This year, the gain will be closer to eight percent, which reflects last year’s stock market move. That puts household net worth almost back to where it was during the late 1990s at the height of the stock market “bubble.” Gains in net worth, along with tax cuts and equity-out mortgage refinancing, kept spending from falling during the recession. Effects of the latter two factors are coming to an end, but the consumer is not done. Consumers have repaired their balance sheets during the period; Debt service burdens and household financial obligations have actually fallen since late 2001, and bankruptcies and credit card delinquencies have fallen in recent months. Retail sales nationwide grew by 8% last year. The largest gains were in building materials, home furnishings, electronics & appliances, and apparel. Global Insight expects real consumer spending (of which retail sales accounts for roughly two-fifths) to increase by 4.0% this year, the strongest increase since 2000. In Arizona, retail sales grew at an 8% annual rate during last year’s fourth quarter and by a preliminary 8.5% during the first quarter of 2004. Our forecasts call for an 8.1% gain for the entire year. (Metro Phoenix ARIZONA'S ECONOMY will also see 8.1% with 7.4% forecast for metro Tucson). See forecast table page 4. Although consumers will continue spending, the driving forces behind spending are shifting. Extra cash from federal tax cuts has come to an end and mortgage refinancing has dwindled as interest rates moved up. These two sources are being replaced by real income growth fueled by solid wage gains, the return of incentive forms of compensation, and job growth. Arizona personal income will increase by 7.6% this year, and wage gains will average 4.0%. This year will be a good year for the consumer. HOUSING MARKETS REMAIN BUOYANT It also will be a good year for housing markets. Residential permits statewide were up a strong 26% compared to the prior year during the first quarter, following a 12.7% gain for all of 2003. Resale markets, as measured by MLS data, recorded gains of 15.3% in metro Phoenix and 13.4% in metro Tucson during the first quarter. Higher mortgage rates will slow new and resale housing, but only marginally. Mortgage rates are expected to move up very gradually, and would have to reach 8% before prospective buyers are shut out. Higher rates will act to restrain price appreciation, however, and will shift the demand for housing toward apartments. With apartment vacancies well above desirable levels, it will be several months before new construction shifts to apartments. LABOR MARKETS GROWING RAPIDLY Since mid-2003, labor markets have seen significant improvement, and job creation has taken off. During the past year, unemployment in Arizona has fallen a full percentage point to 4.9% in March. During that same period, nearly 56,000 new jobs have been created. That’s roughly 2% yearon-year growth, but closer to three percent quarter-on-quarter, after adjusting for seasonal patterns. That ranks Arizona third for job growth, following only Nevada and Virginia. Metro Phoenix accounts for 40,000 of the new jobs, and Metro Tucson 5,500. Job creation is spread widely across sectors, with only a few sectors not yet ARIZONA'S ECONOMY NEITHER INFLATION IN COMMODITIES AND ENERGY, NOR RISING INTEREST RATES, NOR HIGHER TAXES, NOR FALTERING CONSUMERS, WILL DERAIL THIS EXPANSION. participating. Employment in information (which includes publishing, recording, broadcasting, telecommunications, Internet service providers, data processing, and the information services industries) continues to decline into a fourth year. Mining and “other services” are no longer losing jobs but neither are they growing. Manufacturing, state & local government, and professional and business services are adding workers, but employment levels remain below previous peaks. All the remaining sectors have fully recovered lost employment and are setting new all time records each month. Construction, education & health services, and professional & business services have created the most new jobs during the past year. All sectors will soon be setting new highs, and job growth will accelerate going forward. A quarterly survey of hiring intentions conducted by Manpower, Inc. shows net hiring strength has improved during the past two surveys, reflecting increased willingness of business managers to hire. In Metro Tucson, net hiring strength is the highest since early 2001 with a reading in the high twenties. These readings coincide with our joint efforts with Compass Bank to measure hiring intentions as part of the Business Leaders Confidence Index®. Just over half of the Arizona participants in our March 2004 survey said that they expected their industry to add workers during the second quarter. Our forecasts call for job creation to accelerate to near 100,000 statewide by year end (a growth rate in excess of four percent). The largest numbers will be seen in professional & business services (23,200), retail trade (14,000), construction (13,200), education and health services (12,300), leisure & hospitality (9,200), and financial activities (8,800). A looming challenge is the shortage of skilled workers, and a number of businesses already are experiencing shortages. Nurses, medical technicians, radiologists, and pharmacists are reported to be hard to find. There is a huge shortage of teachers. Vehicle repair shops, long-haul trucking, home remodelers, security firms, manufacturers and information technology companies also will find it difficult to recruit skilled workers. And shortages are going to get worse as time passes. According to one estimate, the U.S. will see a shortfall of 10 million workers by 2015, as baby-boom retirees check out of the labor force. As jobs continue to be created, labor force participation will increase as discouraged workers re-engage. Migration flows also will accelerate. Arizona’s population will grow by nearly 165,000 (2.9%) this year and by 195,000 (3.4%) in 2005. Population growth will in turn boost demand for housing and for jobs across all sectors. The economy has entered a period of rapid growth. Both 2004 and 2005 promise to bring the fastest growth in a decade. So what should we worry about now? Presidential campaigning will have a negative effect on confidence, but that will evaporate after the election. Neither inflation in commodities and energy, nor rising interest rates, nor higher taxes, nor faltering consumers, will derail this expansion. Neither will global outsourcing or a lack of job creation. The biggest challenge ahead may well be the looming shortage of skilled workers. ■ F O R E C A S T S P O N S O R S Arizona Department of Commerce Arizona Joint Legislative Budget Committee Arizona Public Service Company Bank One CB Richard Ellis City of Glendale City of Mesa City of Tucson Compass Bank Elliott D. Pollack and Company KB Home Pascua Yaqui Tribe Pima Association of Governments Pima County Salt River Project Tucson Electric Power Company Tucson Newspapers PAGE 3 F O R E C A S T Forecasts for Arizona Personal Income ($ mill) percent change Wage per Employee percent change Aggregate Retail Sales ($ mill)* percent change Population (000s, mid-year) percent change Residential Permits percent change Non Farm Employment (000s) percent change Goods-Producing percent change Service-Providing percent change Trade, Trans., & Utilities percent change Prof. & Business Services percent change Leisure & Hospitality percent change Government percent change Phoenix-Mesa Metro Area Personal Income ($ mill) percent change Wage per Employee percent change Aggregate Retail Sales ($ mill)* percent change Population (000s, mid-year) percent change Residential Permits percent change Non Farm Employment (000s) percent change Goods-Producing percent change Service-Providing percent change Trade, Trans., & Utilities percent change Prof. & Business Services percent change Leisure & Hospitality percent change Government percent change Tucson Metro Area Personal Income ($ mill) percent change Wage per Employee percent change Aggregate Retail Sales ($ mill)* percent change Population (000s, mid-year) percent change Residential Permits percent change Non Farm Employment (000s) percent change Goods-Producing percent change Service-Providing percent change Trade, Trans., & Utilities percent change Prof. & Business Services percent change Leisure & Hospitality percent change Government percent change T A B L E S 2004 161,620.2 7.6 37,991 4.0 64,627.7 7.5 5,794.6 2.9 72,307 2.0 2,389.3 4.3 373.7 4.3 2,015.7 4.3 469.1 4.7 339.3 7.3 241.9 4.0 400.2 1.7 2005 172,802.3 6.9 39,469 3.9 67,908.7 5.1 5,990.1 3.4 67,091 -7.2 2,489.8 4.2 383.8 2.7 2,106.1 4.5 490.2 4.5 360.9 6.4 250.1 3.4 414.6 3.6 2006 184,668.1 6.9 40,868 3.5 71,101.9 4.7 6,180.8 3.2 65,735 -2.0 2,573.5 3.4 393.9 2.6 2,179.7 3.5 504.4 2.9 379.0 5.0 257.6 3.0 422.2 1.8 2007 198,870.5 7.7 42,608 4.3 75,376.9 6.0 6,374.3 3.1 68,908 4.8 2,666.8 3.6 403.8 2.5 2,263.0 3.8 520.9 3.3 399.7 5.5 265.9 3.2 431.4 2.2 2008 213,797.9 7.5 44,472 4.4 80,030.3 6.2 6,574.1 3.1 71,291 3.5 2,758.7 3.4 413.5 2.4 2,345.2 3.6 535.7 2.8 416.9 4.3 272.7 2.6 441.1 2.3 2009 230,414.5 7.8 46,395 4.3 84,934.4 6.1 6,777.9 3.1 73,663 3.3 2,855.9 3.5 425.1 2.8 2,430.9 3.7 550.2 2.7 435.1 4.4 280.1 2.7 451.2 2.3 2010 250,660.9 8.8 48,515 4.6 90,978.4 7.1 6,994.1 3.2 80,084 8.7 2,983.7 4.5 440.0 3.5 2,543.7 4.6 571.2 3.8 464.1 6.7 289.9 3.5 464.9 3.0 112,798.0 7.6 40,364 4.0 44,386.9 7.9 3,713.4 3.2 55,919 1.9 1,684.3 4.4 275.6 3.9 1,408.8 4.5 346.1 4.9 265.8 5.9 165.6 5.7 220.5 1.8 121,060.8 7.3 41,912 3.8 46,396.9 4.5 3,842.2 3.5 52,315 -6.4 1,760.5 4.5 288.0 4.5 1,472.5 4.5 362.0 4.6 281.3 5.8 171.4 3.5 228.8 3.8 130,053.9 7.4 43,557 3.9 49,010.9 5.6 3,970.7 3.3 52,564 0.5 1,825.9 3.7 293.9 2.1 1,532.0 4.0 376.6 4.0 296.8 5.5 177.0 3.3 233.3 2.0 140,184.8 7.8 45,506 4.5 52,284.5 6.7 4,096.2 3.2 53,749 2.3 1,891.7 3.6 300.0 2.1 1,591.7 3.9 390.1 3.6 311.1 4.8 183.5 3.6 238.0 2.0 150,254.2 7.2 47,502 4.4 55,501.5 6.2 4,219.7 3.0 57,255 6.5 1,949.2 3.0 305.5 1.8 1,643.8 3.3 400.7 2.7 321.0 3.2 187.2 2.0 242.8 2.0 161,173.3 7.3 49,507 4.2 58,794.0 5.9 4,341.9 2.9 57,136 -0.2 2,010.0 3.1 314.1 2.8 1,695.9 3.2 410.9 2.5 330.0 2.8 191.2 2.1 247.7 2.0 174,333.0 8.2 51,633 4.3 63,009.1 7.2 4,472.0 3.0 60,751 6.3 2,088.3 3.9 322.0 2.5 1,766.4 4.2 424.3 3.3 345.9 4.8 198.0 3.6 254.6 2.8 24,213.2 6.1 32,391 3.5 9,825.6 6.8 933.0 2.4 8,568 3.1 358.6 3.1 55.1 3.2 303.5 3.1 56.1 2.9 43.5 4.1 38.7 4.6 80.5 2.5 25,759.6 6.4 33,510 3.5 10,295.0 4.8 955.6 2.4 8,770 2.3 373.2 4.1 56.5 2.5 316.7 4.4 57.4 2.4 48.0 10.2 40.3 4.2 82.7 2.7 27,773.7 7.8 34,671 3.5 10,846.3 5.4 979.4 2.5 8,993 2.5 388.4 4.1 58.3 3.2 330.1 4.2 58.8 2.5 52.2 8.8 42.0 4.1 85.1 2.9 29,934.8 7.8 36,019 3.9 11,451.9 5.6 1,003.4 2.4 8,893 -1.1 403.2 3.8 60.4 3.6 342.9 3.9 60.3 2.5 55.6 6.5 43.5 3.8 87.7 3.1 32,085.9 7.2 37,428 3.9 12,024.9 5.0 1,026.5 2.3 8,600 -3.3 415.7 3.1 62.0 2.8 353.7 3.1 61.5 2.0 58.0 4.2 44.7 2.5 90.2 2.8 34,423.1 7.3 38,855 3.8 12,647.5 5.2 1,048.7 2.2 8,304 -3.4 427.4 2.8 63.2 1.9 364.2 3.0 62.7 2.0 60.0 3.6 45.8 2.6 92.7 2.8 37,086.0 7.7 40,341 3.8 13,346.4 5.5 1,071.3 2.2 8,303 0.0 441.1 3.2 64.6 2.1 376.5 3.4 64.2 2.4 62.4 4.0 47.5 3.7 95.6 3.2 * Aggregate Retail Sales includes retail, food, restaurant & bars and gasoline sales. Source: Economic and Business Research Program, Eller College of Management, The University of Arizona PAGE 4 ARIZONA'S ECONOMY A R I Z O N A APACHE COUNTY Civilian Labor Force, ADES Employment Unemployment Unemployment Rate (%) Employees on Nonagricultural Payrolls, ADES Total Total Private Goods-Producing Service-Providing Trade, Transportation, and Utilities Other Private Service-Providing Government Federal Government State and Local Government Sales ($000s) ADOR Gross Retail Retail Restaurants & Bars Gasoline, EBR Gallons (000s) ADOT Contracting Hotel/Motel New Housing Units Authorized, Census C-40 Total Units Single Family Units NAVAJO COUNTY Civilian Labor Force, ADES Employment Unemployment Unemployment Rate (%) Employees on Nonagricultural Payrolls, ADES Total Total Private Goods-Producing Natural Resources and Mining Construction Manufacturing Service-Providing Trade, Transportation, and Utilities Information Financial Activities Professional and Business Services Educational and Health Services Leisure and Hospitality Other Services Government Federal Government State and Local Government Sales ($000s) ADOR Gross Retail Retail Restaurants & Bars Gasoline, EBR Gallons (000s) ADOT Contracting Hotel/Motel New Housing Units Authorized, Census C-40 Total Units Single Family Units E C O N O M I C I N D I C A T O R S % change versus year ago for most recent: month 12-months DEC 2003 JAN 2004 FEB 2004 MAR 2004 APR 2004 21,500 18,750 2,750 12.8 22,275 19,050 3,225 14.5 22,200 19,075 3,125 14.1 22,050 19,200 2,850 12.9 22,525 19,550 2,975 13.2 3.4 3.3 4.4 0.9 -1.4 -2.0 2.6 3.8 19,350 6,150 600 18,750 1,950 3,600 13,200 3,000 10,200 19,350 6,100 475 18,875 1,925 3,700 13,250 3,025 10,225 19,575 6,225 500 19,075 1,925 3,800 13,350 3,000 10,350 19,625 6,225 500 19,125 1,950 3,775 13,400 3,025 10,375 19,775 6,350 550 19,225 1,950 3,850 13,425 3,025 10,400 1.2 0.4 -8.3 1.5 8.3 -1.9 1.5 0.8 1.7 -2.7 0.9 -11.7 -2.3 6.6 0.6 -4.3 1.8 -6.0 9,791 5,399 640 3,752 2,500 7,425 692 8,859 4,467 526 3,865 2,460 6,649 421 8,923 3,766 554 4,603 2,344 4,825 475 ... ... ... 5,274 2,702 ... ... ... ... ... ... ... ... ... -1.6 -7.3 4.5 17.6 20.4 9.8 -15.9 7.0 -0.0 4.3 15.6 -4.9 9.9 3.0 2 2 12 12 3 3 8 8 9 9 12.5 12.5 36.6 36.6 35,700 32,075 3,625 10.2 36,375 32,150 4,225 11.6 36,250 32,150 4,100 11.3 36,250 32,450 3,800 10.5 36,600 32,625 3,975 10.9 3.5 2.0 16.9 13.0 1.6 1.2 4.2 2.6 28,525 17,575 3,350 925 1,650 775 25,175 5,575 600 875 925 3,025 2,475 750 10,950 1,650 9,300 28,150 17,425 3,200 900 1,550 750 24,950 5,425 600 875 950 3,150 2,475 750 10,725 1,450 9,275 28,450 17,500 3,150 875 1,525 750 25,300 5,500 600 875 975 3,175 2,475 750 10,950 1,500 9,450 28,650 17,525 3,100 800 1,525 775 25,550 5,450 600 900 1,000 3,175 2,525 775 11,125 1,575 9,550 28,800 17,700 3,150 850 1,550 750 25,650 5,475 625 825 1,000 3,175 2,675 775 11,100 1,625 9,475 1.0 3.5 0.0 -5.6 5.1 -3.2 1.1 3.3 13.6 13.8 5.3 8.5 -1.8 0.0 -2.8 3.2 -3.8 0.6 3.6 -0.9 -5.5 3.2 -3.6 0.8 3.2 7.5 14.7 5.3 11.4 -0.5 -1.6 -4.0 -1.9 -4.3 72,593 58,917 5,562 8,114 5,405 12,568 1,815 59,450 46,676 4,857 7,917 5,040 7,739 1,463 57,776 42,972 5,087 9,717 4,948 9,516 1,862 ... ... ... 11,320 5,799 ... ... ... ... ... ... ... ... ... 5.4 -0.3 8.8 38.5 41.7 2.9 15.7 4.0 -2.0 6.1 48.5 22.4 5.9 0.9 19 19 30 30 28 28 28 28 44 44 12.8 12.8 3.6 4.9 See sources and abbreviations at the bottom of Page 12. ARIZONA'S ECONOMY PAGE 5 A R I Z O N A GRAHAM COUNTY Civilian Labor Force, ADES Employment Unemployment Unemployment Rate (%) Employees on Nonagricultural Payrolls, ADES Total Total Private Goods-Producing Service-Providing Trade, Transportation, and Utilities Other Private Service-Providing Government Federal Government State and Local Government Sales ($000s) ADOR Gross Retail Retail Restaurants & Bars Gasoline, EBR Gallons (000s) ADOT Contracting COCONINO COUNTY Civilian Labor Force, ADES Employment Unemployment Unemployment Rate (%) Employees on Nonagricultural Payrolls, ADES Total Total Private Goods-Producing Natural Resources and Mining Construction Manufacturing Service-Providing Trade, Transportation, and Utilities Information Financial Activities Professional and Business Services Educational and Health Services Leisure and Hospitality Other Services Government Federal Government State and Local Government Sales ($000s) ADOR Gross Retail Retail Restaurants & Bars Gasoline, EBR Gallons (000s) ADOT Contracting Hotel/Motel New Housing Units Authorized, Census C-40 Total Units Single Family Units E C O N O M I C I N D I C A T O R S % change versus year ago for most recent: month 12-months DEC 2003 JAN 2004 FEB 2004 MAR 2004 APR 2004 11,025 10,400 625 5.7 10,875 10,125 750 6.9 10,925 10,200 725 6.6 10,925 10,225 700 6.4 10,850 10,150 700 6.5 -2.3 -2.2 -3.4 -1.2 -2.3 -1.3 -14.3 -12.3 6,975 4,300 450 6,525 1,425 2,425 2,675 325 2,350 6,725 4,150 425 6,300 1,350 2,375 2,575 300 2,275 6,925 4,225 450 6,475 1,400 2,375 2,700 300 2,400 6,950 4,250 475 6,475 1,375 2,400 2,700 300 2,400 6,975 4,250 450 6,525 1,400 2,400 2,725 300 2,425 -2.4 -1.2 -10.0 -1.9 3.7 -2.0 -4.4 -7.7 -4.0 -1.3 -0.3 4.1 -1.6 0.5 -1.5 -2.8 -6.1 -2.3 16,406 13,898 1,190 1,318 878 2,766 13,532 11,009 1,275 1,248 795 1,747 13,700 10,751 1,372 1,577 803 1,661 ... ... ... 1,747 895 ... ... ... ... ... ... ... 72.7 90.2 87.9 -18.0 -16.1 14.0 6.3 5.6 4.2 5.1 -12.9 -8.8 65,800 61,525 4,275 6.5 65,875 61,050 4,825 7.3 66,325 61,825 4,500 6.8 66,825 62,875 3,950 5.9 68,325 64,075 4,250 6.2 4.7 3.9 18.1 12.8 1.4 0.9 9.3 7.6 57,900 39,525 5,775 100 2,750 2,925 52,125 9,725 450 1,450 2,975 7,025 10,500 1,625 18,375 3,350 15,025 56,550 38,200 5,550 125 2,500 2,925 51,000 9,275 450 1,425 2,925 7,025 9,975 1,575 18,350 3,075 15,275 57,650 38,475 5,675 125 2,550 3,000 51,975 9,150 450 1,425 2,975 7,100 10,100 1,600 19,175 3,050 16,125 58,175 39,075 5,775 125 2,600 3,050 52,400 8,825 500 1,450 3,075 7,100 10,725 1,625 19,100 3,125 15,975 59,050 40,225 5,825 125 2,650 3,050 53,225 9,125 525 1,525 3,200 7,100 11,275 1,650 18,825 3,125 15,700 2.8 4.0 2.2 -16.7 3.9 1.7 2.9 1.7 10.5 0.0 10.3 7.2 4.2 0.0 0.3 -3.1 1.0 0.1 1.7 1.9 -4.3 1.2 3.0 -0.1 0.2 -3.1 1.6 7.0 4.4 0.5 -1.5 -3.1 -1.8 -3.3 117,052 87,358 18,023 11,670 7,774 23,116 9,048 87,328 59,697 15,633 11,998 7,637 21,844 6,645 94,072 62,633 16,879 14,560 7,415 17,809 7,661 ... ... ... 18,271 9,361 ... ... ... ... ... ... ... ... ... 18.6 7.9 39.3 15.3 18.0 -5.6 19.0 1.8 1.0 6.3 -0.9 -19.5 8.0 4.4 94 92 58 56 94 88 80 77 83 83 5.1 5.1 47.5 13.6 See sources and abbreviations at the bottom of Page 12. PAGE 6 ARIZONA'S ECONOMY A R I Z O N A GREENLEE COUNTY Civilian Labor Force, ADES Employment Unemployment Unemployment Rate (%) Employees on Nonagricultural Payrolls, ADES Total Total Private Goods-Producing Service-Providing Trade, Transportation, and Utilities Other Private Service-Providing Government Federal Government State and Local Government Sales ($000s) ADOR Gross Retail Retail Restaurants & Bars Gasoline, EBR Gallons (000s) ADOT Contracting Hotel/Motel* E C O N O M I C I N D I C A T O R S APR 2004 % change versus year ago for most recent: month 12-months DEC 2003 JAN 2004 FEB 2004 MAR 2004 3,550 3,325 225 6.3 3,600 3,375 225 6.3 3,550 3,325 225 6.3 3,550 3,350 200 5.6 3,525 3,325 200 5.7 -4.1 -2.2 -27.3 -24.2 -4.8 -3.4 -20.4 -16.4 3,325 2,800 2,250 1,075 225 325 525 50 475 3,350 2,800 2,250 1,100 225 325 550 50 500 3,350 2,800 2,250 1,100 225 325 550 50 500 3,350 2,800 2,225 1,125 225 350 550 50 500 3,325 2,775 2,225 1,100 225 325 550 50 500 -2.9 -3.5 -2.2 -4.3 -10.0 -7.1 0.0 0.0 0.0 -3.5 -4.2 -3.0 -4.3 -9.9 -7.9 0.8 20.0 -0.9 7,151 6,556 224 371 247 355 244 6,137 5,566 191 380 242 916 167 6,893 6,266 215 412 210 891 234 ... ... ... 438 224 ... ... ... ... ... ... ... ... ... -29.9 -33.1 21.2 25.1 28.0 29.5 -16.9 18.7 19.0 -3.3 32.3 9.1 -34.9 -7.2 81,950 79,500 2,450 3.0 82,575 79,775 2,800 3.4 83,075 80,250 2,825 3.4 84,075 81,375 2,700 3.2 84,275 81,625 2,650 3.1 4.0 4.1 -0.9 -4.7 3.3 3.6 -5.2 -8.2 54,625 43,550 9,550 975 5,450 3,125 45,075 10,275 675 1,875 4,075 8,550 6,900 1,650 11,075 1,275 9,800 53,775 42,950 9,375 925 5,400 3,050 44,400 10,025 675 1,875 4,025 8,600 6,725 1,650 10,825 1,275 9,550 54,750 43,150 9,375 950 5,400 3,025 45,375 9,900 675 1,875 4,175 8,750 6,775 1,625 11,600 1,275 10,325 55,300 43,700 9,600 1,075 5,475 3,050 45,700 9,875 675 1,900 4,250 8,825 6,950 1,625 11,600 1,275 10,325 55,575 44,025 9,575 1,100 5,375 3,100 46,000 10,025 650 1,850 4,325 8,900 7,050 1,650 11,550 1,275 10,275 4.2 3.4 2.4 15.8 2.4 -1.6 4.6 0.0 4.0 4.2 6.1 10.9 1.1 -4.3 7.4 2.0 8.2 2.7 2.0 -0.1 9.4 -0.1 -2.7 3.3 0.5 0.3 5.3 1.8 9.4 -0.4 -4.3 5.8 4.8 5.9 153,584 125,692 17,478 10,414 6,937 47,731 4,520 119,989 93,206 15,751 11,032 7,023 37,994 4,002 122,362 92,818 16,490 13,055 6,648 40,125 5,437 ... ... ... 15,675 8,031 ... ... ... ... ... ... ... ... ... 14.2 11.1 16.9 8.3 10.9 9.3 14.8 12.0 10.4 6.4 31.3 8.3 12.2 3.4 222 209 238 232 236 202 283 270 248 225 11.7 19.7 -5.2 11.5 * Includes Graham County data. YAVAPAI COUNTY Civilian Labor Force, ADES Employment Unemployment Unemployment Rate (%) Employees on Nonagricultural Payrolls, ADES Total Total Private Goods-Producing Natural Resources and Mining Construction Manufacturing Service-Providing Trade, Transportation, and Utilities Information Financial Activities Professional and Business Services Educational and Health Services Leisure and Hospitality Other Services Government Federal Government State and Local Government Sales ($000s) ADOR Gross Retail Retail Restaurants & Bars Gasoline, EBR Gallons (000s) ADOT Contracting Hotel/Motel New Housing Units Authorized, Census C-40 Total Units Single Family Units See sources and abbreviations at the bottom of Page 12. ARIZONA'S ECONOMY PAGE 7 A R I Z O N A GILA COUNTY Civilian Labor Force, ADES Employment Unemployment Unemployment Rate (%) Employees on Nonagricultural Payrolls, ADES Total Total Private Goods-Producing Service-Providing Trade, Transportation, and Utilities Other Private Service-Providing Government Federal Government State and Local Government Sales ($000s) ADOR Gross Retail Retail Restaurants & Bars Gasoline, EBR Gallons (000s) ADOT Contracting Hotel/Motel MOHAVE COUNTY Civilian Labor Force, ADES Employment Unemployment Unemployment Rate (%) Employees on Nonagricultural Payrolls, ADES Total Total Private Goods-Producing Natural Resources and Mining Construction Manufacturing Service-Providing Trade, Transportation, and Utilities Information Financial Activities Professional and Business Services Educational and Health Services Leisure and Hospitality Other Services Government Federal Government State and Local Government Sales ($000s) ADOR Gross Retail Retail Restaurants & Bars Gasoline, EBR Gallons (000s) ADOT Contracting Hotel/Motel New Housing Units Authorized, Census C-40 Total Units Single Family Units E C O N O M I C I N D I C A T O R S % change versus year ago for most recent: month 12-months DEC 2003 JAN 2004 FEB 2004 MAR 2004 APR 2004 18,325 17,075 1,250 6.8 18,400 17,025 1,375 7.5 18,125 16,800 1,325 7.3 18,300 17,075 1,225 6.7 18,575 17,275 1,300 7.0 -0.4 0.4 -10.3 -10.0 -1.0 -0.3 -8.7 -7.9 13,675 8,725 2,025 11,650 2,200 4,500 4,950 475 4,475 13,425 8,475 2,000 11,425 2,125 4,350 4,950 450 4,500 13,350 8,450 1,975 11,375 2,100 4,375 4,900 450 4,450 13,550 8,625 2,000 11,550 2,150 4,475 4,925 475 4,450 13,725 8,725 2,025 11,700 2,200 4,500 5,000 475 4,525 -0.5 0.6 -4.7 0.2 3.5 1.7 -2.4 -13.6 -1.1 -1.1 -2.5 -8.9 0.4 -1.0 0.0 1.3 -7.3 2.4 31,314 24,479 3,603 3,233 2,153 8,273 640 22,754 15,742 3,492 3,519 2,240 6,858 662 26,674 18,548 3,614 4,512 2,298 7,345 772 ... ... ... 4,936 2,529 ... ... ... ... ... ... ... ... ... 16.5 9.7 10.6 -3.0 -0.7 27.1 17.7 8.0 1.9 4.4 44.0 19.0 1.1 3.8 76,575 73,175 3,400 4.4 77,600 73,925 3,675 4.7 77,550 73,900 3,650 4.7 78,150 74,975 3,175 4.1 78,825 75,425 3,400 4.3 5.9 6.2 0.0 -5.6 4.1 4.9 -9.8 -13.3 47,350 39,925 9,425 100 5,900 3,425 37,925 10,950 875 2,000 3,475 5,625 5,550 2,025 7,425 525 6,900 47,500 40,125 9,400 100 5,825 3,475 38,100 10,675 875 1,975 3,675 5,600 5,800 2,125 7,375 525 6,850 47,725 40,275 9,300 100 5,775 3,425 38,425 10,750 875 2,000 3,625 5,625 5,950 2,150 7,450 525 6,925 48,050 40,550 9,400 100 5,875 3,425 38,650 10,650 900 2,050 3,475 5,575 6,300 2,200 7,500 525 6,975 48,250 40,775 9,475 100 5,925 3,450 38,775 10,725 900 2,075 3,500 5,550 6,400 2,150 7,475 550 6,925 0.8 1.7 -1.8 0.0 -5.6 5.3 1.5 -0.7 2.9 12.2 2.2 -0.9 10.3 2.4 -3.5 4.8 -4.2 3.8 5.3 4.1 0.0 2.5 7.2 3.7 4.8 0.2 15.8 10.0 0.4 9.9 1.5 -4.0 1.2 -4.4 140,343 113,604 13,895 12,843 8,555 33,364 1,914 115,994 90,001 12,164 13,829 8,803 33,105 2,611 127,974 95,693 14,903 17,377 8,849 35,475 2,922 ... ... ... 19,973 10,233 ... ... ... ... ... ... ... ... ... 19.0 16.2 19.8 6.7 9.2 34.8 16.3 10.8 9.3 6.4 21.0 -0.4 10.3 8.0 273 228 254 226 259 239 269 267 295 277 8.5 5.7 16.5 16.9 See sources and abbreviations at the bottom of Page 12. PAGE 8 ARIZONA'S ECONOMY A R I Z O N A LA PAZ COUNTY Civilian Labor Force, ADES Employment Unemployment Unemployment Rate (%) Employees on Nonagricultural Payrolls, ADES Total Total Private Goods-Producing Service-Providing Trade, Transportation, and Utilities Other Private Service-Providing Government Federal Government State and Local Government Sales ($000s) ADOR Gross Retail Retail Restaurants & Bars Gasoline, EBR Gallons (000s) ADOT Contracting Hotel/Motel YUMA METROPOLITAN REGION Civilian Labor Force, ADES Employment Unemployment Unemployment Rate (%) Employees on Nonagricultural Payrolls, ADES Total Total Private Goods-Producing Natural Resources and Mining Construction Manufacturing Service-Providing Trade, Transportation, and Utilities Information Financial Activities Professional and Business Services Educational and Health Services Leisure and Hospitality Other Services Government Federal Government State and Local Government Sales ($000s) ADOR Gross Retail Retail Restaurants & Bars Gasoline, EBR Gallons (000s) ADOT Contracting Hotel/Motel New Housing Units Authorized, Census C-40 Total Units Single Family Units E C O N O M I C I N D I C A T O R S APR 2004 % change versus year ago for most recent: month 12-months DEC 2003 JAN 2004 FEB 2004 MAR 2004 6,875 6,475 400 5.8 7,050 6,550 500 7.1 6,925 6,450 475 6.9 6,875 6,425 450 6.5 6,850 6,375 475 6.9 3.4 2.4 18.8 14.8 1.1 0.4 12.3 10.8 4,775 2,300 250 4,525 1,050 1,000 2,475 175 2,300 4,875 2,350 250 4,625 1,050 1,050 2,525 175 2,350 4,925 2,425 275 4,650 1,100 1,050 2,500 175 2,325 4,950 2,475 325 4,625 1,075 1,075 2,475 175 2,300 5,000 2,550 350 4,650 1,100 1,100 2,450 175 2,275 3.6 -1.0 0.0 3.9 -8.3 7.3 8.9 16.7 8.3 1.0 -5.6 -0.7 1.1 -9.7 -2.4 8.7 13.9 8.3 16,190 10,189 2,080 3,922 2,612 2,429 342 21,655 14,724 2,815 4,116 2,620 2,727 526 18,200 10,396 2,680 5,124 2,609 3,025 428 ... ... ... 5,633 2,886 ... ... ... ... ... ... ... ... ... 11.8 4.8 15.0 -0.7 1.6 87.7 -13.3 14.2 6.5 14.3 26.0 4.6 9.7 2.6 72,425 60,550 11,875 16.4 71,225 60,250 10,975 15.4 69,800 59,675 10,125 14.5 68,700 59,200 9,500 13.8 74,200 55,900 18,300 24.7 6.4 2.1 22.2 14.8 0.8 1.4 -1.0 -1.7 47,400 34,400 6,925 25 3,900 3,000 40,475 9,725 1,050 1,250 4,050 5,675 4,300 1,425 13,000 2,825 10,175 47,125 34,525 6,850 25 3,850 2,975 40,275 9,550 1,000 1,250 4,400 5,700 4,325 1,450 12,600 2,850 9,750 47,875 34,625 6,975 25 3,975 2,975 40,900 9,375 1,000 1,275 4,300 5,725 4,475 1,500 13,250 2,875 10,375 47,675 34,350 6,650 25 3,925 2,700 41,025 9,400 1,000 1,300 4,275 5,700 4,525 1,500 13,325 2,900 10,425 45,450 32,175 6,000 25 4,025 1,950 39,450 8,350 975 1,225 4,150 5,675 4,350 1,450 13,275 2,875 10,400 2.2 1.3 2.1 0.0 15.8 -17.9 2.3 -0.3 -2.5 -5.8 12.9 2.7 -4.4 -1.7 4.7 3.6 5.1 1.8 2.4 6.0 0.0 12.4 -2.5 1.2 -3.4 8.2 -2.9 22.7 4.6 -5.2 -4.3 0.4 2.3 -0.2 136,643 111,258 12,322 13,062 8,701 25,880 2,739 115,598 87,702 13,963 13,933 8,869 24,453 3,547 126,240 94,652 15,332 16,257 8,279 21,678 4,780 ... ... ... 17,301 8,864 ... ... ... ... ... ... ... ... ... 15.3 13.8 18.1 0.5 2.8 -6.8 22.8 9.8 8.4 8.2 16.2 -3.6 22.5 17.2 106 106 163 163 199 199 256 256 293 293 80.9 80.9 37.0 47.5 See sources and abbreviations at the bottom of Page 12. ARIZONA'S ECONOMY PAGE 9 A R I Z O N A SANTA CRUZ COUNTY Civilian Labor Force, ADES Employment Unemployment Unemployment Rate (%) Employees on Nonagricultural Payrolls, ADES Total Total Private Goods-Producing Service-Providing Trade, Transportation, and Utilities Other Private Service-Providing Government Federal Government State and Local Government Sales ($000s) ADOR Gross Retail Retail Restaurants & Bars Gasoline, EBR Gallons (000s) ADOT Contracting Hotel/Motel New Housing Units Authorized, Census C-40 Total Units Single Family Units COCHISE COUNTY Civilian Labor Force, ADES Employment Unemployment Unemployment Rate (%) Employees on Nonagricultural Payrolls, ADES Total Total Private Goods-Producing Natural Resources and Mining Construction Manufacturing Service-Providing Trade, Transportation, and Utilities Information Financial Activities Professional and Business Services Educational and Health Services Leisure and Hospitality Other Services Government Federal Government State and Local Government Sales ($000) ADOR Gross Retail Retail Restaurants & Bars Gasoline, EBR Gallons (000s) ADOT Contracting Hotel/Motel New Housing Units Authorized, Census C-40 Total Units Single Family Units E C O N O M I C I N D I C A T O R S % change versus year ago for most recent: month 12-months DEC 2003 JAN 2004 FEB 2004 MAR 2004 APR 2004 14,650 13,150 1,500 10.2 15,000 13,475 1,525 10.2 14,825 13,325 1,500 10.1 14,750 13,350 1,400 9.5 14,675 13,200 1,475 10.1 4.1 3.1 13.5 9.0 2.4 3.9 -7.0 -9.0 12,775 9,225 1,300 11,475 5,100 2,825 3,550 1,150 2,400 12,950 9,425 1,325 11,625 5,250 2,850 3,525 1,125 2,400 13,000 9,425 1,325 11,675 5,200 2,900 3,575 1,175 2,400 13,000 9,450 1,350 11,650 5,200 2,900 3,550 1,150 2,400 12,900 9,325 1,350 11,550 5,075 2,900 3,575 1,150 2,425 2.4 0.3 -1.8 2.9 0.5 0.9 8.3 4.5 10.2 3.5 2.0 -0.9 4.1 5.8 -2.9 7.8 2.2 10.8 45,301 37,358 3,394 4,549 3,030 6,994 1,040 27,679 20,402 3,101 4,176 2,658 5,402 671 30,733 22,551 3,198 4,984 2,538 5,331 1,236 ... ... ... 5,443 2,789 ... ... ... ... ... ... ... ... ... 13.6 10.7 4.2 8.2 10.7 63.4 11.8 10.9 6.4 3.3 44.4 20.4 50.0 -0.8 46 44 26 26 36 36 51 49 36 36 -33.3 -29.4 2.2 10.3 45,575 43,675 1,900 4.2 46,050 43,850 2,200 4.8 45,850 43,650 2,200 4.8 45,975 43,900 2,075 4.5 46,250 44,050 2,200 4.8 0.8 1.7 -15.4 -16.0 0.5 1.1 -10.3 -10.8 34,100 22,475 3,075 50 2,150 875 31,025 6,350 450 900 3,450 3,625 3,550 1,075 11,625 4,725 6,900 33,725 22,325 3,100 50 2,200 850 30,625 6,100 475 900 3,475 3,600 3,600 1,075 11,400 4,675 6,725 34,000 22,300 3,050 50 2,150 850 30,950 6,050 450 900 3,475 3,650 3,650 1,075 11,700 4,750 6,950 34,125 22,450 3,100 50 2,200 850 31,025 6,050 450 925 3,450 3,700 3,675 1,100 11,675 4,775 6,900 34,400 22,625 3,125 50 2,175 900 31,275 6,100 450 900 3,650 3,725 3,600 1,075 11,775 4,850 6,925 1.7 1.0 1.6 0.0 0.0 5.9 1.7 0.8 -5.3 2.9 2.1 4.9 -2.7 -2.3 3.1 7.2 0.4 0.7 0.2 -0.3 9.1 1.0 -4.0 0.8 2.2 -3.0 0.9 0.7 2.5 -4.5 -0.8 1.5 4.9 -0.7 93,447 77,371 8,586 7,490 4,990 17,680 2,243 65,467 49,834 8,125 7,508 4,779 14,925 2,362 71,636 53,610 8,956 9,070 4,619 11,901 3,193 ... ... ... 10,496 5,377 ... ... ... ... ... ... ... ... ... 9.3 4.2 15.0 22.9 25.8 -17.6 32.5 6.9 7.9 0.4 5.4 -13.5 24.5 10.0 53 53 54 54 53 53 76 76 90 83 28.6 18.6 10.5 10.0 See sources and abbreviations at the bottom of Page 12. PAGE 10 ARIZONA'S ECONOMY A R I Z O N A E C O N O M I C TUCSON METROPOLITAN REGION (PIMA) Civilian Labor Force (000s) ADES Employment Unemployment Unemployment Rate, Seas. Adj. (%) Employees on Nonagricultural Payrolls (000s) ADES Total Natural Resources and Mining Construction Manufacturing Computer and Electronic Prod. Aerospace Products and Parts Wholesale Trade Retail Trade Transp., Warehousing, and Utilities Information Financial Activities Professional and Business Services Educational and Health Services Arts, Entertainment, and Recreation Accommodation Food Svcs and Drinking Places Other Services Federal Government State and Local Government State and Local Government Education Sales ($000s) ADOR Aggregate Retail Sales Retail Food, EBR Restaurants & Bars Gasoline, EBR Contracting Hotel/Motel New Housing Units Authorized, Census C-40 adjusted by EBR Total Units Single Family Units 2-5-plus Unit Structures Housing Sales and Prices, TAR Total Sales ($000s) Total Units Average Price ($) Tucson International Airport, TAA Total Passengers Total Aircraft Movements I N D I C A T O R S APR 2004 JAN 2004 FEB 2004 MAR 2004 430.3 414.6 15.7 3.7 429.1 412.1 17.0 3.9 432.2 415.1 17.1 3.9 433.9 417.5 16.4 3.9 435.5 418.5 17.0 4.2 2.2 2.5 -5.6 -6.7 0.6 1.2 -11.1 -12.2 355.2 1.1 23.5 28.6 5.2 11.5 7.2 42.2 7.7 7.7 15.3 42.5 47.1 5.2 7.5 24.3 14.5 9.8 71.0 48.0 347.1 1.1 23.2 28.4 5.3 11.4 7.2 39.6 7.7 7.7 15.3 41.3 47.0 5.2 7.4 24.3 14.4 9.7 67.6 44.8 351.9 1.1 23.1 28.3 5.3 11.3 7.3 39.2 7.8 7.7 15.4 41.7 47.5 5.1 7.8 24.7 14.5 10.0 70.7 47.9 352.2 1.2 23.2 28.3 5.3 11.3 7.3 39.2 7.7 7.7 15.5 41.2 47.5 5.3 7.7 25.1 14.7 10.0 70.6 47.8 353.1 1.2 23.3 28.4 5.3 11.3 7.3 39.3 7.7 7.6 15.4 41.6 47.4 5.5 7.8 25.1 14.9 10.1 70.5 47.8 1.4 9.1 4.0 -1.0 0.0 -2.6 0.0 1.0 -1.3 2.7 2.7 1.7 4.6 5.8 4.0 0.8 2.1 6.3 -1.5 1.1 0.5 -15.9 1.9 -4.3 -5.2 -6.9 -1.1 0.4 -0.4 -1.9 4.1 0.4 5.3 3.9 -0.2 -1.0 0.7 5.9 -1.1 0.6 955,026 704,939 108,903 90,944 50,240 153,835 19,298 769,060 515,950 108,331 93,206 51,573 126,494 26,517 776,069 503,073 108,893 101,423 62,680 137,959 37,926 ... ... 109,233 ... 66,888 ... ... ... ... ... ... ... ... ... 8.3 6.1 5.5 13.3 -0.5 14.5 4.6 6.2 5.0 9.1 2.3 14.8 9.4 2.6 694 656 38 559 518 41 669 629 40 904 838 66 707 655 52 -11.3 -7.7 -40.2 9.2 19.3 -52.0 189,934 1,081 175,702 167,133 929 179,906 192,399 1,024 187,890 279,257 1,346 207,472 310,860 1,505 206,552 37.2 20.5 13.9 23.3 13.2 8.6 308,589 18,187 280,768 22,588 319,935 21,462 369,092 22,099 ... ... 6.9 -3.3 0.2 -10.4 I 2003 II 2003 III 2003 IV 2003 903.1 1.2 3.1 1.9 3.9 908.3 1.2 3.1 1.9 4.0 913.8 1.3 3.2 1.9 4.2 919.3 1.3 3.2 1.9 4.2 924.8 1.2 3.2 1.9 4.3 2.4 3.1 1.9 1.2 9.4 2.3 7.3 2.6 -0.3 8.4 22,511 13,760 846 112 5,408 4,077 24,927 22,725 13,875 855 114 5,430 4,162 25,018 22,938 13,990 864 115 5,452 4,246 25,103 23,152 14,104 873 116 5,474 4,331 25,186 ... ... ... ... ... ... ... 3.9 3.5 4.4 4.6 1.6 8.5 1.5 3.9 3.4 4.3 4.1 1.6 8.8 1.5 TUCSON METROPOLITAN REGION (PIMA) - QUARTERLY DATA Demographics & Vital Statistics (000s, seas adj) ADHS & EBR Population Natural Increase Births Deaths Net Migration Personal Income by Source ($mil, SAAR) EBR Total Personal Income Earnings by Place of Work Less: Contributions for Social Insurance Plus: Adjustment for Residence Plus: Dividends, Interest & Rents Plus: Transfer Payments Per Capita Personal Income ($, SAAR) EBR % change versus year ago for most recent: month 12-months DEC 2003 I 2004 % change versus year ago for most recent: quarter 4-quarters See sources and abbreviations at the bottom of Page 12. ARIZONA'S ECONOMY PAGE 11 A R I Z O N A E C O N O M I C PHOENIX-MESA METROPOLITAN REGION (MARICOPA AND PINAL) Civilian Labor Force (000s) ADES Employment Unemployment Unemployment Rate, Seas. Adj. (%) Employees on Nonagricultural Payrolls (000s) ADES Total Natural Resources and Mining Construction Durable Goods Fabricated Metal Products Computer and Electronic Prod. Aerospace Products and Parts Non-Durable Goods Wholesale Trade Retail Trade Utilities Transportation and Warehousing Information Finance and Insurance Real Estate, Rental, and Leasing Professional and Business Services Educational Services Health Care and Social Assistance Arts, Entertainment, and Recreation Accommodation Food Svcs and Drinking Places Other Services Federal Government State and Local Government State and Local Government Education Sales ($000s) ADOR Aggregate Retail Sales Retail Food, EBR Restaurants & Bars Gasoline, EBR Contracting Hotel/Motel New Housing Units Authorized, Census C-40 Total Units Single Family Units 2-4 Unit Structures 5-plus Unit Structures Housing Sales and Prices, ARMLS Total Sales ($000s) Total Units Average Price ($) Phoenix Skyharbor International Airport, PSIA Total Passengers Total Aircraft Movements I N D I C A T O R S % change versus year ago for most recent: month 12-months DEC 2003 JAN 2004 FEB 2004 MAR 2004 APR 2004 1,824.1 1,748.4 75.7 4.3 1,823.6 1,742.5 81.1 4.5 1,829.5 1,746.6 82.9 4.6 1,838.0 1,763.1 74.9 4.2 1,850.7 1,771.4 79.3 4.5 2.9 3.8 -13.5 -16.7 1.5 2.4 -13.1 -14.6 1,662.2 2.0 137.0 101.8 13.2 35.9 14.7 27.5 77.5 204.8 8.0 51.9 36.5 102.5 33.8 262.9 27.1 140.4 20.7 27.0 111.5 61.7 22.4 205.2 109.5 1,629.0 2.0 135.6 101.4 13.1 35.6 14.6 27.3 76.6 196.6 8.0 51.2 35.8 101.5 32.9 258.5 26.9 140.7 20.6 27.0 108.4 61.4 21.8 194.8 99.4 1,644.0 2.0 136.3 101.3 13.1 35.6 14.5 27.1 76.4 194.9 8.1 51.0 35.7 102.6 33.1 260.5 27.5 141.1 20.8 27.4 110.7 61.8 21.6 204.1 108.6 1,652.0 2.0 138.0 101.2 13.2 35.6 14.5 27.2 76.3 194.3 8.1 51.5 36.1 103.2 33.3 261.5 27.7 142.1 21.0 27.7 112.3 62.4 21.6 204.5 108.8 1,660.9 2.0 140.6 101.5 13.2 35.5 14.5 26.9 76.1 195.6 8.1 51.5 35.6 103.7 33.2 264.2 28.4 142.3 21.0 27.7 113.1 62.4 21.6 205.4 109.1 2.8 0.0 11.9 -0.3 3.1 -5.6 -1.4 -3.2 -1.7 3.9 2.5 0.2 -6.6 3.3 0.3 2.9 15.9 4.2 -2.3 0.0 2.0 1.1 0.0 2.4 4.5 1.7 -4.8 6.2 -4.9 -1.3 -11.4 -2.6 -1.0 -1.8 2.5 3.0 -0.9 -4.7 3.5 -0.5 2.3 14.9 4.7 1.0 3.0 0.6 -0.2 1.6 1.8 4.8 4,301,857 3,196,318 464,681 435,544 205,314 856,205 82,402 3,413,037 2,286,934 464,379 442,780 218,945 673,335 117,815 3,520,035 2,330,510 466,787 458,863 263,875 718,092 140,705 ... ... 468,245 ... 283,209 ... ... ... ... ... ... ... ... ... 10.5 8.9 6.0 13.6 2.9 14.9 13.0 8.6 6.4 11.8 7.5 24.0 8.3 11.2 5,313 4,441 44 828 3,623 3,068 112 443 3,940 3,431 154 355 5,818 5,490 174 154 6,480 4,854 254 1,372 58.9 26.6 296.9 666.5 21.0 19.2 192.1 20.6 1,277,588 6,023 212,118 1,007,585 4,774 211,057 1,214,668 5,863 207,175 1,779,136 8,205 216,836 1,792,196 8,452 212,044 34.6 21.4 10.8 34.3 18.5 13.6 3,129,645 45,345 2,936,387 45,454 2,985,842 ... 3,576,506 ... 3,344,797 ... 6.9 -2.2 4.7 -1.4 See sources and abbreviations below. Sources and abbreviations: ADES: Arizona Department of Economic Security ADHS: Arizona Department of Health Services ADOR: Arizona Department of Revenue ADOT: Arizona Department of Transportation ARMLS: Arizona Regional Multiple Listing Service ASPB: Arizona State Parks Board BEA: Bureau of Economic Analysis, U.S. Department of Commerce PAGE 12 BLS: Bureau of Labor Statistics, U.S. Department of Labor Census C-40: Bureau of the Census, U.S. Department of Commerce EBR: Economic & Business Research Program, The University of Arizona NPS: National Park Service, U.S. Department of the Interior PSIA: Phoenix Skyharbor International Airport SAAR: Seasonally adjusted at annual rates TAA: Tucson Airport Authority TAR: Tucson Association of Realtors U.S. Bankruptcy Court, District of Arizona USBCBP: U.S. Bureau of Customs and Border Protection, U.S. Department of Homeland Security ARIZONA'S ECONOMY A R I Z O N A E C O N O M I C I 2003 II 2003 PHOENIX-MESA METROPOLITAN REGION (MARICOPA AND PINAL) - QUARTERLY DATA Demographics & Vital Statistics (000s, seas adj) ADHS & EBR Population 3,556.6 3,584.5 Natural Increase 8.8 9.0 Births 15.0 15.2 Deaths 6.2 6.2 Net Migration 18.5 18.8 Personal Income by Source ($mil, SAAR) EBR Total Personal Income 102,760 104,142 Earnings by Place of Work 75,906 76,923 Less: Contributions for Social Insurance 4,833 4,904 Plus: Adjustment for Residence -39 -39 Plus: Dividends, Interest & Rents 18,617 18,749 Plus: Transfer Payments 13,109 13,413 Per Capita Personal Income ($, SAAR) EBR 28,892 29,054 ARIZONA QUARTERLY DATA Demographics & Vital Statistics (000s, seas adj) ADHS & EBR Population Natural Increase Births Deaths Net Migration Personal Income Derivation ($mil, SAAR) EBR Total Personal Income Earnings by Place of Work Less: Contributions for Social Insurance Plus: Adjustment for Residence Plus: Dividends, Interest & Rents Plus: Transfer Payments Components of Earnings ($mil, SAAR) BEA Wages and Salaries Other Labor Income EBR Proprietor’s Income Farm Nonfarm Per Capita Personal Income ($, SAAR) EBR Average Wage Per Employee, Annual Rate ($) EBR I N D I C A T O R S IV 2003 I 2004 3,612.9 9.1 15.3 6.2 19.3 3,641.6 9.1 15.3 6.2 19.6 3,670.3 9.1 15.3 6.2 19.6 3.2 3.7 1.9 -0.6 5.8 3.2 7.3 3.7 -1.3 2.9 105,524 77,940 4,974 -40 18,882 13,717 29,208 106,907 78,957 5,045 -40 19,015 14,020 29,357 ... ... ... ... ... ... ... 5.5 5.6 6.1 -5.8 2.7 9.5 2.3 5.6 5.5 6.1 -2.6 2.9 9.8 2.3 5,571.0 12.2 22.3 10.0 27.1 5,610.2 11.8 22.7 10.9 27.5 5,649.2 12.1 22.9 10.8 26.5 5,688.2 11.7 22.7 11.1 27.7 5,728.7 11.6 22.8 11.2 30.1 2.8 -5.1 2.6 11.8 11.1 2.8 1.2 3.4 5.8 2.2 146,229 102,620 6,472 604 27,287 22,190 148,975 104,689 6,592 613 27,423 22,845 151,520 106,564 6,718 621 27,637 23,418 153,998 108,438 6,845 629 28,280 23,499 156,615 110,709 7,097 639 28,607 23,759 7.1 7.9 9.7 5.7 4.8 7.1 6.0 6.6 7.7 4.9 2.4 8.4 81,571 9,724 11,130 665 10,465 26,249 35,205 83,064 9,942 11,309 568 10,742 26,554 35,914 84,435 10,177 11,845 733 11,112 26,822 36,054 85,745 10,430 ... ... ... 27,073 ... 87,440 10,806 ... ... ... 27,338 ... 7.2 11.1 11.7 64.3 9.3 4.2 3.3 5.4 10.7 8.5 22.2 7.7 3.0 2.7 DEC 2003 JAN 2004 FEB 2004 MAR 2004 APR 2004 820,878 76,287 283,391 461,200 208,345 41,948 155,244 11,153 921,308 74,844 244,386 602,078 249,197 46,305 184,862 18,030 884,717 83,771 220,741 580,205 303,594 64,489 215,603 23,502 1,360,123 155,483 420,201 784,439 415,362 62,651 312,242 40,469 ... ... ... ... ... ... ... ... 14.7 13.1 2.1 23.1 -0.2 3.4 0.6 -10.8 2.7 2.9 4.0 1.9 -1.8 3.7 -2.2 -5.7 694,438 1,981,063 699,708 1,995,408 683,577 1,940,255 756,746 2,055,396 719,128 2,001,759 -0.1 6.0 -11.5 -6.2 184.3 179.9 185.2 180.9 186.2 181.9 187.4 182.9 188.0 183.5 2.3 2.1 2.0 1.9 TRAVEL AND TOURISM - MONTHLY DATA Visits to Parks & Other Recreational Areas, NPS & ASPB Northern Arizona Historical Scenic Water Based Recreation Southern Arizona Historical Scenic Water Based Recreation International Border Crossings, USBCBP U.S. Citizens Aliens MEASURES OF INFLATION AND PRICES - MONTHLY DATA Consumer Price Index (1982-1984=100) BLS U.S. - All Urban U.S. - Wage Earners % change versus year ago for most recent: quarter 4-quarters III 2003 % change versus year ago for most recent: month 12-months See sources and abbreviations at the bottom of Page 12. ARIZONA'S ECONOMY PAGE 13 A R I Z O N A ARIZONA MONTHLY DATA Civilian Labor Force (000s) ADES Employment Unemployment Unemployment Rate, Seas. Adj. (%) Employees on Nonagricultural Payrolls (000s) ADES Total Natural Resources and Mining Construction Durable Goods Manufacturing Fabricated Metal Products Computer and Electronic Prod. Aerospace Products and Parts Non-Durable Goods Manufacturing Wholesale Trade Retail Trade Utilities Transportation and Warehousing Information Finance and Insurance Real Estate, Rental, and Leasing Professional and Business Services Educational Services Health Care and Social Assistance Arts, Entertainment, and Recreation Accommodation Food Svcs and Drinking Places Other Services Federal Government State and Local Government State and Local Government Education Hours Worked Per Week, Manufacturing, ADES Average Hourly Earnings ($) ADES Construction Manufacturing Trade, Transportation, Utilities Retail Trade Wholesale Trade Sales ($000s) ADOR Aggregate Retail Sales Retail Food, EBR Restaurants & Bars Gasoline, EBR Gallons (000s) ADOT Utilities Communications Amusements Rentals - Personal Property Contracting Mining - Metal, Oil & Gas Hotel/Motel New Housing Units Authorized, Census C-40 Total Units Single Family Units 2-4 Unit Structures 5-plus Unit Structures Bankruptcy Filings, U.S. Bankruptcy Court Total Chapter 7 Chapter 11 Chapter 13 E C O N O M I C I N D I C A T O R S % change versus year ago for most recent: month 12-months DEC 2003 JAN 2004 FEB 2004 MAR 2004 APR 2004 2,708.3 2,582.6 125.7 5.0 2,709.7 2,575.2 134.5 5.2 2,717.1 2,582.3 134.8 5.2 2,728.4 2,605.0 123.4 4.9 2,751.6 2,613.4 138.2 5.4 3.0 3.5 -6.2 -8.5 1.4 2.1 -9.8 -10.9 2,348.9 7.9 184.7 138.5 17.4 41.7 26.7 35.4 94.0 293.6 11.4 65.5 48.8 117.1 44.0 326.1 37.3 216.3 29.6 43.7 161.3 86.2 51.8 355.7 195.9 41.3 2,304.2 7.8 182.3 138.0 17.2 41.4 26.4 35.1 93.2 280.9 11.4 64.9 47.9 116.2 43.1 320.8 37.5 216.3 29.4 43.5 158.4 85.7 51.0 340.8 181.0 40.8 2,328.9 7.9 183.2 137.9 17.0 41.4 26.4 34.9 93.1 278.4 11.5 64.7 47.8 117.5 43.4 323.3 38.5 217.4 29.6 44.4 161.5 86.1 51.2 356.6 196.7 40.5 2,339.2 8.0 185.0 138.0 17.1 41.4 26.3 34.7 93.0 277.7 11.5 65.1 48.3 118.0 43.7 324.4 38.5 218.3 30.4 45.2 164.1 87.0 51.5 356.8 196.7 39.6 2,348.4 8.1 187.3 138.6 17.1 41.3 26.3 33.6 91.7 279.9 11.5 65.1 47.6 118.5 43.4 327.6 39.3 218.8 31.0 45.4 165.1 87.2 51.6 357.1 196.8 40.2 2.5 1.3 9.1 0.1 3.0 -5.1 -1.5 -5.4 -1.3 3.4 1.8 -0.2 -4.8 3.1 0.5 3.0 14.6 4.4 2.6 1.8 1.7 1.2 3.0 1.1 2.8 -0.5 1.5 -5.5 5.1 -4.1 -0.6 -10.6 -4.4 -2.7 -1.5 2.2 2.5 -0.9 -4.0 4.0 -0.9 2.4 13.3 4.8 3.3 2.2 0.2 -0.0 2.8 0.3 2.2 1.3 15.38 14.33 13.45 11.42 17.49 15.42 14.23 13.90 11.73 17.94 15.28 14.17 14.07 11.86 18.09 15.29 14.27 13.87 11.65 17.99 15.27 14.34 13.92 11.54 18.29 1.6 0.8 4.3 0.2 12.1 4.5 0.9 3.0 2.2 8.3 6,219,633 4,573,335 696,519 613,486 336,292 224,016 456,435 239,454 64,136 279,521 1,198,620 42,888 126,938 4,979,216 3,301,909 705,388 617,879 354,040 225,360 500,278 233,812 74,824 249,901 964,188 49,065 167,408 5,134,651 3,348,238 709,046 649,565 427,802 217,855 485,596 243,559 71,938 259,869 1,015,632 56,211 207,632 ... ... 711,260 ... 466,603 239,051 ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... 10.8 8.6 7.5 14.4 4.1 6.6 18.4 3.1 7.1 -5.9 13.9 167.4 12.0 7.6 6.2 6.8 6.4 21.6 0.2 6.3 -2.9 1.3 -7.8 9.2 41.2 5.3 6,706 5,742 116 848 5,021 4,400 154 467 5,515 4,919 199 397 7,790 7,393 202 195 8,290 6,575 331 1,384 46.9 24.5 215.2 442.7 20.0 20.4 89.5 7.4 2,252 1,780 22 450 2,039 1,528 21 490 2,297 1,839 14 444 3,162 2,629 22 511 2,871 2,385 14 472 -2.5 2.1 -36.4 -19.5 3.7 5.9 -8.9 -4.3 See sources and abbreviations at the bottom of Page 12. PAGE 14 ARIZONA'S ECONOMY A R I Z O N A E C O N O M I C MEASURES OF INFLATION AND PRICES - QUARTERLY DATA Consumer Price index (1982-84=100) BLS Western Region (U.S.) U.S. - All Urban Consumers U.S. - Urban Wage Earners Price Indexes (1996=100) BEA Gross Domestic Product Personal Consumption Expenditures I N D I C A T O R S II 2003 III 2003 IV 2003 188.0 183.0 179.1 188.5 183.7 179.6 189.1 184.6 180.3 188.7 184.6 180.3 190.8 186.3 181.9 1.5 1.8 1.6 1.8 2.0 1.9 105.2 104.9 105.4 105.1 105.9 105.5 106.3 105.8 106.9 106.5 1.6 1.5 1.6 1.6 CHANGE OF ADDRESS Attach old label or fill in old address in shaded box below. 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