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Strong recovery predicted for nation, state, Phoenix by ASU economic forecaster

ASU economic forecaster predicts Arizona will add 117,000 jobs in 2022.
December 9, 2021

All jobs recovered after steep but short pandemic-driven recession

The United States, Arizona and the Phoenix metro area have all bounced back from the steep but short economic recession induced by the pandemic, and the outlook is good, according to Arizona State University’s economic forecaster.

Lee McPheters, research professor of economics and director of the JPMorgan Chase Economic Outlook Center at ASU, spoke at the annual ASU/PNC Bank Economic Forecast Luncheon, which was sponsored by the Department of Economics in the W. P. Carey School of Business at the Renaissance Phoenix Downtown Hotel on Wednesday.

“The main message is that the U.S. and Arizona economies were hit hard by the pandemic, but we expect a strong economy into 2022,” he said.

“We’re going to replace all the lost jobs by the end of 2021.”

McPheters said that Arizona lost more than 331,000 jobs in March and April of 2020 – more than the entire Great Recession that extended over several years.

“But after that, we began bouncing back, and we’ve added jobs every month since,” he said, noting that all of the lost jobs in the pandemic recession were recovered by the first quarter of 2021.

“There’s a good chance we’ll see an all-time high employment in Arizona of 3 million by the end of this year.”

The Phoenix economy has continued to move away from reliance on real estate and is much more diverse than it was before.

— Lee McPheters, director of the JPMorgan Chase Economic Outlook Center at ASU

He expects the state to add 117,000 jobs in 2022 – the best year for job growth and the first year to add more than 100,000 jobs since 2006.

“What’s driving employment recovery? The service sector,” he said.

More than 80% of new jobs came from food service, transportation and warehousing, retail, the professional and technology fields and health care.

The Phoenix metro area added 77,000 new jobs in 2021 and ranks third nationwide in job growth for transportation/warehousing and professional/technical, he said.

“The Phoenix economy has continued to move away from reliance on real estate and is much more diverse than it was before,” he said.

McPheters expects the white-hot housing market to stabilize. In 2021, single-family housing permits increased 23% in Arizona, compared with 17% nationwide.

The average home price in Phoenix increased 33.3% in a year but will likely grow at a steadier 4% to 6% going forward, he said.

The average home price in Phoenix is $474,000, which is still less than most other metro areas in the West, including Denver; Austin, Texas; Riverside, California; Provo, Utah; and Seattle.

“This is not the same 80,000-single-family-permits we saw in the housing boom of the mid-2000s, but it is a steady, sustainable trend in home building that is beneficial for the Arizona economy,” he said.

McPheters sees potential risks for Arizona in several areas: pandemic uncertainty, supply chain issues, affordable housing and federal policy.

“I think everyone would agree we need to continue to work on educational issues,” he said.

“Maybe we won’t be No. 1 in terms of spending philosophy, but this is a state that should be ranked in the top half for education, now the lower half.”

Nationally, the economy remains in recovery from the pandemic recession, but there are still weak spots, according to Augustine “Gus” Faucher, chief economist for the PNC Financial Services Group, who spoke at the luncheon.

Across the U.S., employment is still down by more than 4 million, and 2% of the population has dropped out of the labor force, he said.

“Before the pandemic, 63% of all adults were in the labor force, and now it’s less than 62%,” he said. “Some took early retirement. Some are concerned about the health situation and are unwilling to put themselves into that situation.

“Some are having child-care difficulties, with virtual school and child care closed. And there are those who received stimulus payments or extra unemployment benefits and are not ready to come back.

“I do expect many of those people will gradually return to the labor force over the next year and half or so, but it is going to remain a difficult situation for people who are trying to hire.”

Another weak spot is consumer spending on services, such as education, health care, financial services and travel, which fell 15% during the pandemic and is still 2% below pre-pandemic levels.

Meanwhile, consumer spending on durable goods, such as appliances and cars, fell by about 3% during the pandemic but is now 20% higher than pre-pandemic levels, even with the lack of car inventory. Consumer spending accounts for about two-thirds of the U.S. economy.

Both McPheters and Faucher downplayed the likelihood of the current increase in inflation continuing long term.

“The Phoenix inflation rate topped 7% year over year, which is startling,” McPheters said.

But he said that while the consumer price index rose 8.2%, average weekly wages are up more than 12%.

“What that means is that in spite of inflation and higher prices, we still have expansion of purchasing power,” he said.

Faucher said that inflation is likely to increase at about 2% a year going forward.

“We had inflation at below 2% a year over the past decade,” he said. “The financial markets don’t think that the higher inflation we’ve seen recently will become embedded into the economy.”

Lawrence Summers, the Charles W. Eliot University Professor and former president of Harvard University, said that federal stimulus money led to a surge in household income, which led to inflation.

“Right now we’re looking at an economy that is quite strong but at a danger of overheating,” he said. “A bathtub that is overflowing is a real problem.”

The Fed should raise interest rates over the next year to slow down growth, he said.

Summers, former secretary of the Treasury, said that some people believe that with the size of the budget deficit, the U.S. should not engage in significant expenditures.

“I think we’re a better country if we collect taxes more efficiently and if we support an energy transition to a greener economy,” he said.

“I think it’s insane that it takes 20 minutes longer to fly from Boston to Washington than it did 20 years ago because of decaying infrastructure.

“I believe it is important that we make very substantial public investments into the future of our country, but I also believe that as we make those investments, it is enormously important that we do so as efficiently and effectively as possible.”

Top photo: Lee McPheters, research professor of economics and director of the JPMorgan Chase Economic Outlook Center at ASU, spoke at the annual ASU/PNC Bank Economic Forecast Luncheon at the Renaissance Phoenix Downtown Hotel on Dec. 8. He predicted that Arizona will add about 117,000 jobs in 2022. Photo by Charlie Leight/ASU News

Mary Beth Faller

Reporter , ASU News


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Poetry: A companion to grief

December 9, 2021

ASU students facilitate therapeutic poetry workshops for community, health care providers

Long before Walt Whitman cared for the wounded in hospitals during the Civil War, the celebrated American poet was already singing “the body electric.”

Like many of his contemporaries and those who came later — from Emily Dickinson to Sylvia Plath — he understood the connection between the body and soul; how the health of one influences the vitality of the other, so that even what one might consider mere words can have real healing power.

Whitman, Dickinson and Plath are just a few examples Arizona State University Principal Lecturer of English Rosemarie Dombrowski has at the ready should anyone dare cry, “Hokey new-age quackery” at the prospect.

In reality, Dombrowski said, bibliotherapy — a creative art therapy that involves storytelling or the reading of specific texts with the purpose of healing — has a long history in health care, and, as some of her fellow ASU colleagues can attest, plenty of sound research to back it up.

“You don’t see the disappearance of bibliotherapy until after the Enlightenment, when you began to see a split between science and the humanities,” explained Dombrowski, who is part of the College of Integrative Sciences and Arts. “Later, after the civil rights movement and America’s cultural revolution, you start to see a resurgence of this type of therapy in medicine.”

Her own discovery of bibliotherapy after years of studying literature inspired her to create a course on the subject, so that she could introduce a new generation of students to the concept.

“I wondered, how could I have gotten all these degrees in literature and this never came up in any class, the inextricable relationship between medicine and poetry?” she said.

HON 394: Poetry and Medicine walks students through the history of the relationship between the two, from antiquity to present day, and trains them in the various methods and modalities used in the facilitation of bibliotherapy, culminating in their own facilitation of a therapeutic poetry workshop. The course is offered through Barrett, The Honors College.

“My goal is to educate future providers about the myriad benefits of including poetry in their daily practice in some way,” Dombrowski said. “So, for example, when they’re sending a patient off with six pages of info about their condition, how about also including a poem? And I also want them to be able to use poetry in ways that can help them care for themselves, as providers.”

woman wearing a mask and a white t-shirt with a classroom full of students behind her

Grace Fraser, a nursing student taking Rosemarie Dombrowski's HON 394: Poetry and Medicine course, explains what she has learned about how poetry can facilitate healing at a community workshop on Nov. 30. Photo by Charlie Leight/ASU News

Having just completed its third iteration this fall 2021 semester, HON 394: Poetry and Medicine has proven very popular with students, many of whom are planning to embark on careers in the health care field.

“I hated poetry before this,” said Bailey Michaels, a medical studies undergrad who plans to become a physician. “After this class, I read it more often, but I think that what I’ve learned is going to be especially helpful in the future for my patients.”

Michaels and two other students recently led a therapeutic poetry workshop for members of the community in downtown Phoenix at Westward Ho, a former hotel-turned-affordable-housing facility for older adults and those with disabilities, where the ASU Community Collaborative has been providing free health services to residents for several years.

Dombrowski initially forged her own relationship with the facility a few years ago to give her students a space to share what they had learned with the community. The pandemic brought the in-person workshops at Westward Ho to a halt in fall 2020, so Dombrowski worked with leadership at Mirabella, ASU’s new intergenerational living and lifelong learning complex in Tempe, to arrange for her students to lead virtual workshops for their residents that semester.

This fall marked a return to the in-person workshops at Westward Ho, and the students were more than ready. During the workshop led by Michaels and fellow students Danae Mueller, a kinesiology major, and Grace Fraser, a nursing student, the trio began with an explanation of how poetry can facilitate healing.

“Through poetry … many are able to integrate … feelings, reframe traumatic events and develop a more positive outlook for the future,” their handout read.

Participants then read a few poems chosen specifically for their context, which emphasized the importance of community support in healing, and were asked to take part in some writing exercises of their own.

While not everyone shared what they wrote, one resident remarked how comforting it was just to have a space to talk and be heard.

man sitting in a chair wearing a face mask and reading from a notebook

Applied computing undergrad David Ortiz-Leon shares what he wrote during a writing exercise as part of a community-focused therapeutic poetry workshop. Photo by Charlie Leight/ASU News

Later that week, applied computing undergrad David Ortiz-Leon and his group led another workshop, this time geared toward medical practitioners at the Phoenix Biomedical Campus, thanks to a partnership Dombrowski developed with the University of Arizona College of Medicine.

The format was similar to the community-focused workshop, in that participants read poetry and took part in writing exercises, but the content was decidedly different. One poem, “Leaving Early” by Leanne O’Sullivan, expressed the affection and responsibility felt by a nurse for their patient as they turned their care over to the nurse on the next shift.

Participants were asked to think of a patient who made an impression on them and write a note to the provider who would be taking care of the patient after their shift ended.

Ortiz-Leon said that one thing he learned from the poetry and medicine course was that grief isn’t just experienced by patients and their loved ones; sometimes grief is part of being a health care provider, and putting it down on paper can be immensely helpful.

“Something Dr. Dombrowski said that stuck with me is that poetry can’t heal grief, but it can be a companion to it.”

In March 2020, Dombrowski used funds she received as part of a fellowship with the Academy of American Poets to create the nonprofit Revisionary Arts, which provides therapeutic poetry workshops to organizations and communities in need. Many of her current and former students have interned at the nonprofit, putting what they learned to use in the real world.

“I can’t revolutionize health care on my own,” Dombrowski said, “but I can do my part by inspiring these students who can.”

Top photo: ASU Principal Lecturer of English Rosemarie Dombrowski looks on as students in her HON 394: Poetry and Medicine course facilitate a community workshop. Photo by Charlie Leight/ASU News

Emma Greguska

Reporter , ASU News

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