“…the economy is not doing that well and will do worse in the next year…” Ingo Winzer
National Economic Outlook
By Ingo Winzer
January 20, 2023
Jobs in December were up 3 percent from last year, a strong increase in normal times. But considering they were up 3.2 percent in November and 3.6 percent in October it’s not difficult to conclude that growth is slowing.
Its very likely that growth in the past year really just marks continuing recovery from the pandemic, not new growth at all. Then 3 percent growth doesn’t mean the economy is doing well, just that it’s climbing out of it’s pandemic hole. Compared to the level just before the pandemic, the number of jobs today is less than 1 percent higher.
This is bad news for real estate markets because without good economic growth, home prices are likely to decrease steadily over the next two years. A lack of real job growth means a lack of demand for housing, especially with both inflation and interest rates higher than they’ve been in decades.
Jobs were up 3.1 percent in construction, 3 percent in manufacturing, 1.2 percent in retail, 1.5 percent in finance, 2.8 percent in business services, 3.6 percent in healthcare, 5.5 percent at restaurants, and 1.4 percent in government.
The 2.8 percent increase in business service jobs is worrying because just two months ago it was 4 percent. Growth, or the lack of it, in business services is a barometer of how well other businesses are doing.
Have questions that you would like to have answered in the next NEO presentation? Please submit questions here.