National Economic Outlook
By Ingo WInzer
While the national economy seems to be adding jobs at a good 2 percent rate, a look behind the scene is a bit more troubling.
In manufacturing, finance and retail stores, jobs are growing less than 1 percent. At restaurants job growth remains high at 3 percent, but in normal times is less than 2 percent. In healthcare, the recent 4 percent growth rate is boosted by very strong gains at nursing homes, which normally add jobs at less than 1 percent but are currently restocking their staffs after big pandemic losses.
It’s the same in government, where the current 3 percent rate of job growth is driven largely by a 5 percent increase at state governments. In normal times all government sectors add jobs at less than 1 percent a year.
If you take out the pandemic-related rehiring, it’s clear that the job growth we will see in the near future is probably no better than 1 percent.
The strongest evidence for slow growth comes from the very large business services sector, where jobs for temporary workers are being shed at a high rate as businesses see weak demand.
A slow economy isn’t necessarily a surprise; the US population has been growing less than 1 percent a year. But it means that there isn’t, and won’t be, a vast unfilled demand for more housing that supports high home prices. Home builders already know this – they’ve been shedding jobs because demand is weak.
That means home prices will be coming down, faster in some markets than in others, but eventually everywhere. In Austin, where population and job growth remain high, home prices nonetheless fell 8 percent in the past 12 months, with more decreases likely; if it happens here, it will happen everywhere.
Total jobs in September were up 2.1 percent from last year, including 2 .7 percent in construction, 0.7 percent in manufacturing, 0.4 percent in retail, 0.9 percent in finance, 1.2 percent in business services, 3.9 percent in healthcare, 3.6 percent at restaurants, and 2.8 percent in government.
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