National Economic Outlook
By Ingo Winzer
From the point of job creation, the national economy seems to be flying high; jobs in April were up 2.6 percent over last year. But a closer look shows that the pace of growth is slowing as more jobs lost to the pandemic have been regained. The actual rate of new job creation, rather than just recovery, may be closer to the 1.5 percent annual pace that prevailed for years before the pandemic hit.
The latest Gross Domestic Product estimates bear this out. Adjusted for inflation, GDP in the first quarter was up 1.6 percent over last year, a very modest gain. And the latest population estimates show a gain of just 0.4 percent in 2022, of which 0.3 percent was due to immigration; the increase of births over deaths was just 0.1 percent. A stagnant population won’t produce a vibrant economy.
These observations indicate weak support for real estate markets in the next few years, both residential and commercial. Home prices already are lower than last summer and could easily fall 10 percent or so in the next year, with more to come after that.
The 2.6 percent growth of jobs in April included gains of 2.7 percent in construction, 1.7 percent in manufacturing, 0.2 percent in retail, 1.0 percent in finance, 2.3 percent in business services, 3.7 percent in healthcare, 5.4 percent at restaurants, and 2.1 percent in government.
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