Above-average retail sales pump up Arizona economy

Even without the lift from seasonal visitors, Arizona’s economy has been humming lately from above-average retail sales and rising employment, an economist reported Wednesday.

Arizona retail sales tracked by Visa Inc., excluding vehicles, jumped 8.6 percent in March, compared with about 6 percent for the nation, said Wayne Best,chief economist for the global-payments company. Those figures exclude the impact of tourists in the state for recent sporting events such as spring training baseball or the NCAA Final Four basketball tournament, said Best, who is visiting Phoenix to speak to local business leaders affiliated with the National Federation of Independent Business.

They also exclude auto sales because most people don’t use credit cards to buy vehicles.

The retail-sales burst shows the Arizona economy is generally healthy, despite some weakness in housing, Best said. “The employment picture continues to look very good in Phoenix overall,” he said.

Strong retail-sales figures have been spread across several categories including furniture, hardware, apparel and restaurants, he said.

Economic strength nationally also has been evident in rising consumer confidence.

While the Federal Reserve has started to increase interest rates, which have shown up in higher rates on credit cards and other loan categories, Best said that hasn’t yet choked off consumer spending or confidence. He noted that card delinquencies generally are at low levels, as are average debt-service burdens, reflecting debt payments as a proportion of household income.

Wages also have been rising, boosting confidence levels. This is especially apparent for workers who have been on the job one year or longer. Wages for these workers nationally have been climbing at around a 4.5 percent pace lately, Best said.

Home prices in the Phoenix metro area remain about 17 percent below their pre-recession peaks, and building permits are being issued at a subdued pace, Best said. However, other reports point to modest price increases in recent months, an uptick in sales activity and slightly faster selling times.