April 2008 Newsletter
A Few Words About Jobs and the Economy
The Arizona Department of Commerce reports the seasonally adjusted jobless rate jumped in December to 4.7% from 4.1% a year earlier. It was the highest jobless rate of last year. Given the continued year-over-year job losses, it suggests Arizona's economy has not yet hit bottom. Unemployment for the US was 5.0% that month.
California's December unemployment rate was even worse, at 6.1%, much of it in the southern part of the state. This was up from 4.8% a year earlier.
The good news is governors of both states are seriously exploring public works projects in an effort to stimulate economic recovery. This should mean improved infrastructure throughout the two states.
The election's in full swing with no incumbent running for the White House. There's little hope that markets will be manipulated to improve election returns. Former Federal Reserve Chairman Alan Greenspan observes; "Our economy is getting close to stall speed...and we are far more vulnerable at levels where growth is so slow than we would be otherwise."
However, with rent increases of 9%+ in locations like San Jose, San Francisco, LA, and Orange County, there are still pockets of light. Phoenix, Tucson and San Diego all saw rent hikes in '07 below the inflation rate of 6.3%. We can only hope the recent drop in interest rates provides enough of a counter-weight. And with job instability the way it is, look for an increase in shorter leases to help residents feel they have the maximum flexibility to pick up and go.
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