Economist: 'Recovering, not recovered'
Yavapai County, the state as a whole and nation are continuing a slow recovery four years after the Great Recession officially ended, Arizona State University economist Lee McPheters said in a presentation on Sept. 24 in Prescott.
"We are not there yet," said McPheters, research professor of economics at the W.P. Carey School of Business and director of the school's JP Morgan Chase Economic Center. He described the state economy as "recovering but not recovered."
McPheters spoke for the third year in a row on the economic outlook for the greater Prescott area and Arizona. The ASU Foundation for a New American University arranged his visit, which drew an estimated 150 people to the Rowle P. Simmons Community Center.
McPheters said the Prescott market regained 11 percent, or 1,200, of the 11,100 jobs lost during the recession. Employment peaked at 65,000 jobs in March 2007. Sources for his statistics include the U.S. Bureau of Labor Statistics and the U.S. Census Bureau.
The Prescott market experienced a 2 percent increase in jobs in August 2012 and a 0.2 percent drop (100 jobs) this August. The Phoenix market experienced the highest growth rate, 2.4 percent, higher than August 2012.
The unemployment rate in the Prescott market dropped from 8.9 percent to 8.5 percent over the previous August. McPheters attributed part of the drop to people leaving the labor force.
McPheters also provided figures that showed the Prescott market has fewer jobs than the national average in computers (410 local jobs) and financial operations (1,370) and above the national average in health practitioners (3,200), managers (2,670), retail sales (2,190), food services (6,270), construction (2,890) and firefighters (650).
He showed positive signs with permits for single-family homes expected to increase from 700 in 2013 to 1,300 in 2014. Population growth will be modest at 0.7 percent this year and 1.1 percent in 2014.
McPheters said Arizona will add 70,000 jobs in 2014, with the outlook better than in most states, while also showing the eighth lean year of subpar growth.
McPheters also peppered his presentation with occasional humor by using photos and cartoons.
However, much of his talk was somber.
He said profits are rising while wages have been stagnant for years, contributing to income inequality that in turn is slowing the recovery.
Wages drove the outcome of the 2012 presidential election, McPheters said.
McPheters said the income gap continues to grow as more jobs are outsourced overseas.
He said the U.S. economy added 160,000 jobs in August. However, the economy will have to add 100,000 jobs a month to accommodate people entering the labor force.
He fielded questions from several people in the audience.
He said he does not know how the Affordable Care Act, also known as Obamacare, will affect Arizona. However, he said it might be positive if it encourages people to seek other jobs knowing they will have health insurance.
His speech was "excellent," said Dick Hollister, a property manager who lives in Kirkland.
"I was hoping it would be a little more positive," Hollister said. "He has done a lot of research. He tells it like it is."
McPheters' talk also impressed Alexandria Wright, who started five weeks ago as director of the Regional Economic Development Center at Yavapai College in Prescott.
"With the new role of the college, these types of settings are imperative to engaging the community and creating that collaborative effort toward economic development," she said.