Local Market Monitor, a National REIA preferred vendor, recently released their National Economic Outlook for June, 2018 where they share their thoughts on developments taking place in the U.S. economy.
While the monthly jobs data tell us how the economy is doing overall, it’s also worthwhile to see in what ways it’s been changing. We’re used to the idea that manufacturing jobs have disappeared overseas and that computers will soon be doing all those that are left, but automation and the export of low-skill jobs are part of a self-correcting process by which businesses take advantage of opportunities to provide more and better services – not just cheaper versions of the same old ones.
We can see this happening in two important areas, manufacturing and healthcare. In the past year 260,000 new jobs were created throughout the manufacturing sector, largely because automation, logistics and communications have replaced low wages as the most important costs for many companies. Similarly, there were almost 400,000 new jobs in healthcare, and not as low-wage nursing home aides. These are mainly jobs where people now use computer technology as a matter of course, providing more care than in the past (though we can debate whether it’s better).
How the economy fares in the next few years has little to do with low-wage jobs or more automation – it’s probably consumer debt that will upset the cart – but the rejuvenation of industries through the use of more technology is the important long-term trend.
Total jobs in May were up 1.6 percent over last year, the same as in previous months. Not great but at least steady. Jobs were up 4 percent in construction, 2 percent in manufacturing, healthcare and at restaurants, 1 percent in retail and finance, 2.4 percent in business services, and flat in government.
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.
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