Forecasts: Weak growth plagues western states
Economic forecasters report more job losses and weak growth for the western United States, according to the newest editions of the Western Blue Chip and Arizona Blue Chip Economic Forecasts.
"Although there are scattered signs the economy may be close to bottoming out, there is little optimism about an actual upturn in Arizona or nationally during the second half of this year," writes Lee McPheters, editor of the Arizona Blue Chip Forecast and senior associate dean of the W. P. Carey School of Business at Arizona State University. "The first stirrings of recovery are not expected until the housing market stabilizes and begins its turnaround."
Although single-family home resales in greater Phoenix are up over the same period last year, analysts note more than 40 percent of the sales are foreclosures. Inventories of unsold homes and foreclosures will continue to push prices down, according to the forecasts.
McPheters notes a rate of decline that could mean six more slumping months in Phoenix. The saving grace may be affordability, which improves as prices fall, leading to recovery in the overall real estate market.
McPheters reports that Arizona Blue Chip forecasters have "ratcheted down their expectations for 2008" again. The Arizona economy lost 41,700 jobs in July and is forecast to slip again this month. Construction and finance are still losing jobs, and taxable retail sales for July were down 10 percent over last year. Eight of 16 panelists now project negative growth for 2008.
There is some good news from Wyoming and Texas, according to U.S. Bureau of Labor Statistics numbers in the Western Blue Chip Economic Forecast.
Wyoming, which has topped the job growth chart nationally for all of 2008, continued to lead nonfarm job growth in the year-to-year comparison for July with a 2.5 percent increase. Texas recorded the second highest percentage change with 2.4 percent more jobs created in July compared to a year ago. That increase translates to the highest number of actual jobs added in any state at 250,900. However, other Western states are at the bottom of the job list, recording declines: Oregon (at 35 on the list), California (43), Idaho (45), Nevada (46) and Arizona (49).
McPheters says recovery will begin in some places soon, though. The consensus forecast panel predicts that "Wyoming will continue to post the strongest job gains in the West in 2008 and 2009… Nevada labor markets will recover somewhat in 2009, with employment growth projected at 2.5 percent. The consensus is that California will remain weak, with job growth of less than 1 percent in 2009.
The Western Blue Chip Economic Forecast and the Arizona Blue Chip Economic Forecast report the consensus forecasts of economists at leading firms, universities and state agencies in 12 Western states. The bulletins are produced by the JPMorgan Chase Economic Outlook Center at the W. P. Carey School of Business.