Since peaking at 9.8 percent in November 2009, Phoenix unemployment has gradually trended lower, falling nearly two percentage points to 7.9 percent in November 2011. This compares with a U.S. November unemployment rate of 8.7 percent. Payroll employment in Phoenix also outperformed in 2011, growing at a 1.2 percent annual pace versus 1.0 percent nationally. Looking ahead, Phoenix should gain employment boost from a mix of short-term and longer-term investments by major corporations in the area. Home Depot recently announced the hiring more than 1,000 seasonal workers in the Phoenix area to help handle the company’s spring rush. Many of the positions have the opportunity to become full-time. Intel also will be spending more than $5 billion to build a new chip manufacturing facility in Chandler, expected to eventually add around 1,000 high-wage manufacturing jobs, and boost construction employment over the next two years.
Nominal income growth in Phoenix, fueled by a recovering labor market, is expected to have outpaced national growth by roughly one percent in 2011. This pattern should hold in 2012, as large corporations continue to invest locally.
The weak housing markets remain a significant drag on the local economy, with prices yet to reach a clear bottom. Since peaking in 2007Q1 U.S. home prices are down about 16 percent, according to the FHFA home price index. By the same measure, Phoenix home prices, which peaked earlier in 2006Q4, have fallen 49 percent. Starts are up somewhat from 2010 lows, helped mostly by increases in multifamily construction. Lower homeownership rates post-recession and tight credit availability in mortgage markets are driving the boom in multifamily starts.
Click here for the complete Phoenix MSA Regional Economic Update, including a forecast table and charts of relevant economic activity: Phoenix2012Q1.