Local Market Monitor, a National REIA preferred vendor, recently released their National Economic Outlook for August, 2019 where they share their thoughts on developments taking place in the U.S. economy.
National Economic Outlook – August 2019
August 15, 2019
By Ingo Winzer
The data on Gross Domestic Product for the second quarter are as unenlightening as always. The 2.1 percent annualized growth over the first quarter was a combination of heavy consumer spending, cuts in company inventories, a drop in exports, and strong government spending.
The previous quarter it was poor consumer spending, higher inventories, and higher exports. Go figure.
The job data, on the other hand, are consistent with what we’ve been seeing for several months: a slower rate of growth. Jobs in July were up 1.5 percent from a year ago, the same as in May and June, and down from the 1.8 percent that prevailed earlier this year. This isn’t yet a cause for concern, but a further drop to 1.3 percent would be. We’re at a point where there isn’t much wiggle room.
Jobs were up 2.5 percent in healthcare, 2.2 percent in business services, 2.1 percent at restaurants, 1.2 percent in finance and 1.2 percent in manufacturing. Retail jobs were slightly down, government jobs slightly up.
Jobs in construction were up 2.7 percent, which seems like a lot but isn’t; last year it was 4.8 percent. I have a strong suspicion that home builders in urban markets concentrated on the upper end of the market and it’s now softening.
About the Author: Ingo Winzer is President of Local Market Monitor, and has analyzed real estate markets for more than 20 years. His views on real estate markets are often quoted in the national press and in 2005, he warned that many housing markets were dangerously over-priced. Previously, Ingo was a founder and Executive Vice President of First Research, an industry research company that was acquired by Dun and Bradstreet in March 2007. He is a graduate of MIT and holds an MBA in Finance from Boston University. He resides in Cambridge, Massachusetts.