Local Market Monitor, a National REIA preferred vendor, recently released their monthly National Economic Outlook where they share their thoughts on developments taking place in the U.S. economy.
National Economic Outlook
By Ingo WInzerMay, 2024
Although the number of jobs in the US economy is increasing at a 2 percent annual rate, a lot of that increase is coming from just two major sectors: healthcare and government. This is a long-term cause for concern, because these sectors don’t create economic growth in the way that manufacturing or finance or technology do. But the more immediate problem is that the surge of jobs in these areas is probably temporary, that it masks a deeper overall economic weakness.
Jobs in the government sector have been increasing at a 3 percent annual rate; in normal times they increase less than 1 percent a year. The main reason for the current level of growth is a surge of jobs in state government (including state colleges), which is really just rehiring after large job losses during the pandemic.
In the healthcare sector, jobs are increasing at more than 4 percent a year, while in normal times the rate is 2 percent or less. Again, much of the reason seems to be rehiring rather than new job creation. In particular, there’s been a surge of rehiring at nursing homes, which were ravaged during the pandemic. There’s also been very high hiring in home health services and in family services, which may reflect longer-term changes in the way healthcare is delivered.
If we subtract out the unusually-high job increases in government and healthcare, the economy is producing jobs at just 1 percent a year.
In April, total jobs increased 1.8 percent compared to a year ago, including increases of 3.3 percent in construction, zero in manufacturing, 0.7 percent in retail, 0.5 percent in finance, 0.5 percent in business services, 4.6 percent in healthcare, 1.6 percent at restaurants, and 2.8 percent in government.
Do you have questions that you would like to have answered in the next NEO presentation? Please submit questions here.
Click here for more information about Local Market Monitor.
