With the advance estimate of the national gross domestic product at 2.9 percent for the third quarter of 2016, eyes turn to what the data may mean for Arizona.
The national growth rate — nearly double any quarter in the past year — is released using incomplete data or data subject to revision according to the U.S. Bureau of Economic Analysis. This means the number may be adjusted when complete data are available for the Nov. 29 “second” GDP estimate.
But one analyst believes GDP isn’t the best metric for economic health.
“I don’t think that GDP is the best indicator of economic health, especially for states,” said Jim Rounds, president and founder of Rounds Consulting Group. “The more important sets of numbers, housing and jobs, are showing strength and consistency in the state, and that’s a better indicator.”
Rounds isn’t the only economist who raises eyebrows at GDP. Ted Jones, vice president and chief economist for Stewart Title, questions the jump after months of consistently sluggish growth. He pointed to the BEA’s own warning about incomplete data.
“The advance GDP is always revised, and usually downward,” he said. “It doesn’t make any sense for that number has come so close to 3 percent growth after eight quarters of 2 percent growth or less.”
Arizona State University economics professor Dennis Hoffman is another GDP skeptic.
“Jobs, housing and income are the best indicators of how the economy is really doing in Arizona,” he said in an interview last month.
Elliott Pollack told the Greater Phoenix Chamber of Commerce 2017 Economic Outlook audience that despite the quarterly numbers, 2017 will be “the year of the snail.”
There is optimism for Arizona, however, as economists predict growth over the next 12 months for the state.
Original Article via Eric Jay Toll, Phoenix Business Journal