081522 MARICOPA COUNTY Q32022.PDF

Maricopa County Board of Supervisors -
2022/2023 Economic Update
August 2022
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U.S. Real GDP
Annualized Percent Change; Quarterly, 2010 - 2022*
Source: Bureau of Economic Analysis
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
*Data through Q2 2022
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Recession Period

U.S. Real GDP vs. Employment Change
Annualized and Quarter-over-Quarter Percent Change; Quarterly, Q4 2020 – Q2 2022
Source: Bureau of Economic Analysis; Bureau of Labor Statistics
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 500,000
 700,000
 900,000
 1,100,000
 1,300,000
 1,500,000
 1,700,000
 1,900,000
 2,100,000
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
8%
Real GDP
Employment
3M+ new jobs 
Jan to July

Consumer Price Index vs. Producer Price Index
All Items CPI, All Commodity PPI, Non-Seasonally Adjusted; Year-over-Year Percent Growth, 2010 - 2022*
Source: Bureau of Labor Statistics
-10%
-5%
0%
5%
10%
15%
20%
25%
Recession Period
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*Through July (CPI)/June (PPI) 2022

U.S. Yield Curve
10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity; Monthly, 1985 - 2022*
Source: U.S. Treasury Department
Recession Period
*Through July 2022
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
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Federal Funds Effective Rate
Average Monthly, Not-Seasonally Adjusted, 1985 - 2022*
Source: Board of Governors of the Federal Reserve System
Recession Period
*Through July 2022
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
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What is the story?
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•
Covid hit the economy and the US government overreacted.
•
The recession was short lived and primarily impacted lower income 
people, but the stimulus spending was broad-based.
•
The Federal Reserve made money very cheap and easy to get…for 
too long.
•
Covid issues impacted the supply chain, both goods and labor.

What is the story?
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•
Inflation heated up.
•
Russia/Ukraine further drove up fuel prices.
•
The Fed’s delay in raising interest rates is now being countered with 
aggressive increases in rates and money being pulled out of the 
economy.

What is the story?
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•
A “Volcker” recession by 2023.
•
The next recession will not see the same scale of job losses, but it 
will impact white collar workers more than last time.
•
Reset button pushed and the next cycle begins.

Why does this matter?
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•
The story explains why incomes/spending have been so high and 
resulted in very large government revenue surpluses.
•
It also explains why a recession is right around the corner and that a 
portion of the current revenue surplus is temporary.
•
For context, to get through a typical recession, the state of AZ will 
need an extra $2.5B in reserves if services are to be maintained, 
borrowing is to be limited, and tax increases are to be avoided.

What does this mean?
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•
It means the state does not have as much “extra” 
revenue lying around as people believe.
•
The County may want to be similarly cautious.

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U.S. vs Arizona Job Recovery
Seasonally Adjusted; Monthly Employment Percent Change Since Peak Levels (Jan 08’/Feb 20’)
Source: Bureau of Labor Statistics
-16.0%
-14.0%
-12.0%
-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
1
3
5
7
9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97
U.S. - 2020
U.S. - 2008
AZ - 2020
AZ - 2008

Arizona Employment – Percent Change by Wage Group
Non-Seasonally Adjusted; Change from January 2020
Source: Bureau of Labor Statistics 
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-25.0%
-20.0%
-15.0%
-10.0%
-5.0%
0.0%
5.0%
10.0%
Less than $40K
$40K - $60K
$60K - $80K
$80K - $100K
Over $100K
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U.S. Job Growth 2020
State Ranking
Source: Bureau of Labor Statistics
Rank
%
State
Rank
%
State
1
-0.66%
Idaho
11
-4.31%
Mississippi
2
-1.63%
Utah
12
-4.34%
North Carolina
3
-3.00%
Arkansas
13
-4.59%
Kansas
4
-3.10%
Montana
14
-4.62%
Georgia
5
-3.14%
Arizona
15
-4.82%
Missouri
6
-3.43%
South Dakota
16
-4.91%
Oklahoma
7
-3.66%
Nebraska
17
-4.99%
Virginia
8
-3.98%
Tennessee
18
-5.04%
South Carolina
9
-4.27%
Alabama
19
-5.10%
Iowa
10
-4.28%
Texas
20
-5.22%
Colorado
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U.S. Job Growth 2021 
State Ranking
Source: Bureau of Labor Statistics
Rank
%
State
Rank
%
State
1
6.82%
Nevada
11
3.74%
Maine
2
5.33%
Idaho
12
3.72%
Massachusetts
3
4.95%
Utah
13
3.71%
New Hampshire
4
4.64%
Montana
14
3.66%
Georgia
5
4.56%
Florida
15
3.65%
Arizona
6
4.26%
New Jersey
16
3.50%
Colorado
7
4.22%
Hawaii
17
3.50%
Texas
8
4.16%
North Carolina
18
3.38%
Tennessee
9
3.94%
Rhode Island
19
3.21%
California
10
3.82%
Michigan
20
3.18%
Kentucky
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U.S. Job Growth 2022 
State Ranking; Year-To-Date 2022*
Source: Bureau of Labor Statistics
Rank
%
State
Rank
%
State
1
8.85%
Nevada
11
5.05%
Massachusetts
2
6.13%
California
12
4.97%
Colorado
3
6.12%
Texas
13
4.93%
Oregon
4
5.77%
New Mexico
14
4.32%
Tennessee
5
5.73%
Florida
15
4.31%
Illinois
6
5.62%
Hawaii
16
4.27%
Michigan
7
5.39%
Georgia
17
3.91%
North Carolina
8
5.28%
New York
18
3.87%
Arizona
9
5.24%
New Jersey
19
3.81%
Utah
10
5.13%
Washington
20
3.74%
Pennsylvania
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*Through June 2022

Arizona Unemployment Rate
Seasonally Adjusted; Monthly, 1985 - 2022*
Source: Bureau of Labor Statistics
Recession Period
*Through June 2022
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
11.0%
12.0%
13.0%
14.0%
15.0%
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Arizona, Greater Phoenix, and U.S. Job Growth
Annual Percent Growth 1985 - 2022*
Source: U.S. Bureau of Labor Statistics; AZ Office of Economic Opportunity
Recession Period
*Through June (AZ)/July (U.S.) 2022
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-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
Arizona
Greater Phoenix
U.S.
BETTER
BETTER
BETTER
WORSE
BETTER
BETTER

Example: Per Capita Personal Income in PHX MSA
Phoenix MSA as a Percent of U.S.; Annual 1970 - 2020
Source: U.S. Bureau of Economic Analysis
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75.0%
80.0%
85.0%
90.0%
95.0%
100.0%
105.0%
Phoenix-Mesa-Chandler, AZ
Recession Period

$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
$500,000
$550,000
Maricopa County Median Price of Single-Family Homes Sold
2002-2022* 
Source: ARMLS
Recession Period
*Through June 2022
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Maricopa County Single Family Home Permits
Annually, 1990-2021
Source: U.S. Census Bureau 
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0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
Recession Period

Maricopa County Revenue Forecast Summary
Source: Rounds Consulting Group
Source
FY 2022 
Most Likely 
Scenario
FY 2023
Most Likely 
Scenario
Annual % 
Change
FY 2022 
Recession 
Scenario
FY 2023
Recession 
Scenario
Annual % 
Change
Sales Tax
$880.4M
$933.2M
6.0%
$858.6M
$841.4M
-2.0%
VLT
$188.2M
$194.8M
4.0%
$188.0M
$188.0M
0.0%
Jail Tax
$248.4M
$258.3M
4.0%
$246.3M
$241.3M
-2.0%
HURF
$129.3M
$133.9M
3.5%
N/A
N/A
N/A
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$550,000,000
$600,000,000
$650,000,000
$700,000,000
$750,000,000
$800,000,000
$850,000,000
$900,000,000
$950,000,000
$1,000,000,000
Optimistic
Most Likely
Pessimistic
Recession
Maricopa County Retail Sales Tax Forecast
Fiscal Year 2019-2023 
Source: Rounds Consulting Group
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AZ and MC are resilient, but we could be better…
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AZ is still a solid bet, national top 5.
MC will continue to lead.
But incomes need to rise further.
Public policy matters; how do we 
respond?

Questions?
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