Gross Domestic Product in Arizona and the United States, Inflation-Adjusted Percent Change
A healthy economy exists when inflation-adjusted gains in GDP are at least 2-to-3 percent per year. During the 1991-to-2001 economic cycle, the annual average inflation-adjusted growth rate was 7.2 percent in Arizona and 3.7 percent nationally. However, during the 2001-to-2009 economic cycle, the annual average inflation-adjusted growth rate was only 2.1 percent in Arizona and 1.5 percent nationally. Since 2009, the average has been only 1.4 percent in Arizona and 1.9 percent nationally.
Within an economic cycle, the annual change in GDP is highly variable, exceeding the target during economic expansions and falling short during recessions. Historically during expansions, Arizona’s GDP growth was much higher than the target and the national average due to the state’s much more rapid population growth, but in recent years the gains in Arizona have been less than the national average.
During recessions — as in 2008 and 2009 — Arizona’s economic performance is inferior to the national average. Arizona underperformed the nation again in 2010, as the economy began to recover from the recession. In both 2011 and 2012, Arizona’s gain in real GDP was similar to the national average, but the increases in Arizona in 2013 and 2014 were less than the U.S. average. In four of the last five years, the gains nationally have been around 2 percent, at the lower end of the target range. In contrast, Arizona’s gain was less than 2 percent in four of the five years.