No, Debbie Downer, Arizona's economy isn't dead

I suppose I should just give up trying to counterbalance the economic Cassandras who dominate the discussion in Arizona.

As best I can tell, I've had utterly no effect. Although the grounds for their conclusion shifts from time to time, the conclusion of the economic Cassandras never changes: Arizona's economy stinks and it's only going to get worse. At any point in time in my memory, that's been the prevailing view among local policy elites.

Still, an excessively pessimistic economic outlook distorts policy choices. So, I guess I'm doomed to play Sisyphus to this particular rock.

Viewing the Arizona economy as a single unit is part of the misdiagnosis. There are parts of rural Arizona where the economy really does stink and there is little reason to believe it's going to get better. Hard to see the upside in Yuma's 28 percent unemployment rate.

But the Phoenix metro economy doesn't merit all the gloom and doom.

The Valley rode the housing bubble really high and got really slammed when it burst. But having absorbed that, our recovery has been OK.

Big-city economies are different and are most usefully compared to each other. There are 30 metro areas in the country with populations in excess of 2 million. From 1990 to 2011, Phoenix ranked first among them in percentage job growth.

Think about that for a moment. Even after absorbing all the job losses following the housing bubble burst, the Valley led big-city economies in job growth. Nor, contrary to the Cassandras, was it all low-wage jobs. The increase in average wage per job in the Valley was right at the big-city median.

Job losses in the Valley bottomed out in the summer of 2010. Since then, our recovery has been decent compared to other big-city economies. The Phoenix metro area ranks fourth in percentage job growth since then. Phoenix has added more jobs in this period than other large metro areas frequently cited as our betters, such as Denver, Seattle, Portland and San Diego.

Lately, our performance has slipped compared to the others. But even looking at just the last two years, our job creation ranks in the middle of the pack. We're not pulling up the rear.

Today, nearly two million Valley residents will go to work, do something productive, and earn a paycheck. We produce $210 billion worth of goods and services a year. That's not an economy on the verge of collapse.

Recently, the return of red ink in the state budget has occasioned considerable handwringing about the economy. And it is certainly true that tax collections are probably the most contemporaneous measure of economic performance we have.

Most economic indicators have a time lag, often of months, and are subject to revision as data is refined. Tax collections are a function of underlying economic activity and reported as the money flows in.

State revenue collections are running behind projections. But that's not the primary reason for the return of red ink.

State revenues are running more than three percent ahead of last year. That ain't great, compared to the historical range of six to eight percent. But it's not an indication of an economy that's gone into reverse.

When I try to provide some counterbalancing perspective, I'm sometimes accused of being Pollyannaish. I'm not saying all is fine, or can't be improved. And I'm certainly not saying all will be well.

In fact, one of my contentions is no one can know the economic future. There are too many moving parts to a large economy to be intuited or captured by computer models. That's why, whenever a new economic statistic comes out, every economist seems to be surprised. Ouija boards have a superior predictive record than economists and econometric models.

What I am saying is that the Phoenix metro economy doesn't appear to be on the precipice of consisting of nothing more than tent cities and soup lines. We are in a national economy experiencing sluggish growth. The Phoenix and Arizona economies are also experiencing sluggish growth.

That's not "Happy Days are Here Again."

But it's not a funeral dirge either.

Reach Robb at robert.robb@arizonarepublic.com. Follow him on Twitter at @RJRobb.

(column for 10.24.14)