AZ, US economic growth pace holds through mid-1994. (Arizona)

Economic growth, both nationally and in Arizona, continued at a relatively rapid pace through mid-1994.

Annual growth rates in Arizona ranged by indicator from 7.5 percent for real earnings to 6 percent for real personal income to about 4 percent for employment. The latter likely will be revised upward, to perhaps 5 percent. These growth rates are nearly twice as fast as the national average (4 percent for real earnings, 3.5 percent for real personal income and 2.5 percent for employment).

Nationally, quarterly growth rates have shown little acceleration since late 1991. In Arizona, growth rates have accelerated a little since early 1992. Both locally and nationally, growth is likely to remain at around the same pace into 1995.

The faster growth in real dollar measures than in employment or population (population growth is not quite 3 percent in Arizona and only 1 percent nationally) means that gains in per capita and per employee measures are occurring. For example, real per capita personal income is rising a little more than 3 percent on an annual basis in Arizona, about a percentage point higher than the national average. A growth rate of more than 3 percent should help lower Arizona's high poverty rate, but a national increase of 2 to 2.5 percent has only a marginal impact on poverty. Arizona's faster growth has lifted its per capita personal income ratio to the national average to above 87 percent, from just below 86 percent in late 1992. At the current one percentage point differential in growth rate, the expansion will need to continue for several years for the ratio to return to 93, its historical level during an expansion.

Arizona's earnings growth is being led by the construction industry, which is growing more than twice as fast as the overall economy. Other fast-growth sectors include FIRE (finance, insurance and real estate) and ...