Last month, the Greater Phoenix Chamber welcomed Keith Guido, Senior Investment Strategist for Wells Fargo and Cameron Hinds, Regional Chief Investment Officer, Central Region for Wells Fargo to speak at the Economic Development Insider Series. The discussion ranged from a local and national economic outlook to how the local labor market was impacted by the pandemic recession and provided great insights for businesses.

U.S. Debt & Interest Rates

“The total amount of outstanding government debt is roughly equivalent to the total size of the U.S. economy or GDP,” explained Hinds. “This is a significant increase. The last time we saw this level of U.S. indebtedness relative to the size of the economy, you’d literally have to go back to World War II.”  Although there is a significantly higher amount of debt, the interest for it is much lower. “The risk is if interest rates go up significantly, this is going to become a very significant issue,” Hinds said.  According to Hinds, low interest rates are expected through 2021, after the Federal Reserve cut rates to zero in 2020.

Arizona Labor Market

Coming into 2020, the Arizona economy was thriving.  The unemployment rate was the lowest we’ve seen since prior to the financial crisis of 2008. But like other recessions, a commonality is the amount of job loss nationwide.  “From the February peak, to the April lows, the Arizona labor market lost over 300,000 jobs; which means we lost over 10% of people employed,” said Guido. “The unemployment rate peaked at about 14%.  And if you look through October, which is some of the latest data, we recovered about 67% of those jobs…but we have a lot of work to do as it relates to pre-pandemic levels.” In the last few months of 2020, Arizona averaged about 14,000 new jobs, and that’s more than the roughly 6,000 jobs we’ve averaged over the last couple of years. “So, we are creating more jobs than we typically have, but again you can see the volatility in the unemployment rate,” explained Guido.

The impact on small businesses during the pandemic is also notable in Arizona. “We need small businesses to be successful, and that is a big part of our success coming into 2021,” said Guido. “There are 600,000 small businesses in Arizona, employing 1.1 million workers or 44% of the private sector workforce.  Any risk to the economy going forward would depend on how small businesses react and perform in 2021 and 2022.”

Personal Income

Throughout 2020, Hinds reported personal income rates in Arizona were growing at a more rapid pace compared to the rest of the country. Many people ask how this is possible during the worst economic period we’ve seen since the Great Depression. The answer? Stimulus payments.  “In Arizona, for a lot of unemployed workers, (stimulus payments) replaced well over 100% of their income. So that helped support consumption while the economy was shut down and people were out of work.”  Guido went on to say, “savings spiked (during the recession). That could be a critical part of the recovery as a lot of these benefits expire. Then individuals will have to look into their savings to keep up with their spending.”

Stock Market Outlook

Although there certainly was volatility in the markets in 2020, the S&P 500 recovered to pre-pandemic levels in just 5 months. Guido pointed to several reasons for the massive rally. “First of all, the stock market is a forward-looking price index. So, the market isn’t necessarily looking at where we are today, it’s looking at where we are a year from now or three years from now. And we do view the outlook as being quite positive.” He also expects volatility in the market to be above average as we move forward into 2021. “Despite a pretty positive outlook from an economic standpoint and from a market standpoint, we are seeing some very significant signs of speculation in the market. We could point to the IPO, the initial public offering market.”

Guido predicted that Arizona could see a full recovery in jobs by mid to late-2021, assuming additional stimulus and an effective vaccine roll out.

Hinds concluded the program by summarizing the positive and negative economic impacts we face heading into 2021 by outlining “tailwinds and headwinds” of the current atmosphere to watch out for:


  • Aggressive monetary and fiscal stimulus
  • Low interest rates
  • “Purchasing power” boost from lower inflation
  • “Pent up” demand created by the lockdown
  • Promising coronavirus vaccine news
  • Increased savings and stock market wealth


  • Rise in coronavirus infections
  • Geopolitical risks (U.S. elections, Brexit, European Union discord, trade disputes)
  • Rising bankruptcies, associated layoffs
  • Consumer caution amid pandemic concerns
  • Lingering weakness from earlier economic free fall

To attend the next Economic Development Insider Series program, register online today.






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Posted by Annelise Patterson

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