Phoenix, AZ – The report from the Bureau of Economic Analysis shows personal income in metro areas nationwide up 2.9 percent. Of the state's six metro areas, only Yuma managed to beat that. But particularly telling is that the earnings component -- the amount of change due solely to what people were bringing home in their paychecks -- was far below the rest of the nation. It amounted to less than one percent in Flagstaff, just one-tenth of a percent in the Phoenix area -- and actually declined in the Tucson and Prescott areas. The only thing that kept the economic picture from being worse is that the weak earnings were offset with what the federal government calls "transfer receipts,'' outside funds ranging from retirement and medical benefits to unemployment insurance. Economist Dennis Hoffman of Arizona State University said what concerns him is what happens going forward.
(I fear that we've stalled out here more that a soft patch that we were clearly in. A stall at this point would be really troubling.)
All this is occurring against the backdrop of the debate in Congress that never really addressed the nation's deficit, the downgrade of the nation's credit rating and the sharp drop in the market. Hoffman said that consumers, who drive the economy, are just spooked.
(Confidence is just so fragile. That's really the worry is that is that we've got confidence wounded and barely breathing. And now we're just taking a stick and just jabbing it.)
University of Arizona economist Marshall Vest was equally downbeat, saying that despite predictions last year that the bottom had been reached, the odds of a new recession have increased. For Arizona Public Radio this is Howard Fischer.