Valley economist says report that downgraded Phoenix’s performance is ‘massively flawed’

Feb 13, 2024, 4:25 AM

The view to the north from downtown Phoenix shows multiple construction cranes....

The view to the north from downtown Phoenix shows multiple construction cranes on Feb. 12, 2024. (PHXCityCam Screenshot)

(PHXCityCam Screenshot)

PHOENIX – A Valley economist says Phoenix’s downgrade on an annual ranking of best-performing cities is no reason to panic.

Phoenix checked in at No. 18 among 200 large cities in the Milken Institute’s Best-Performing Cities 2024 report, which was released this month.

Arizona’s largest city was No. 4 on the same list in 2022 and No. 8 last year.

However, Jim Rounds of Tempe-based Rounds Consulting Group told KTAR News 92.3 FM’s Arizona’s Morning News on Monday that the list is “massively flawed” and that Phoenix should still be in the top 10.

Why does Valley economist think Milken Institute is wrong about Phoenix?

Rounds explained that studies comparing data across the nation by nature have to be general, leaving out key elements that are specific to individual communities.

“They looked at things in the wrong way so they could publish something that looked really pretty on the website,” he said. “It shows a map with the different colors of the rates of growth, but this is something I would never reference in any report that I’d be producing here.”

Phoenix slipped in multiple categories the Milken Institute uses for its rankings, most notably job growth.

Rounds pointed out that job growth rankings are based largely on 2022 data, which is both old and skewed by the Arizona economy’s relatively fast recovery from COVID pandemic setbacks.

“A lot of it has to do with fourth grade math, and they should have known this is something that’s pretty basic,” he said. “So, they’re saying this is where Phoenix stands if we didn’t make any adjustment for a global pandemic, and we looked at the numbers from two years ago, and we ignored all the high-tech growth that the Phoenix area has enjoyed over the last couple of years.

“And based on all that, we are still 18. So even though they really screwed this up badly, we’re still top 20.”

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Valley economist says report that downgraded Phoenix’s performance is ‘massively flawed’