Local Market Monitor (a National REIA preferred vendor) recently released their National Economic Outlook for May, 2017 where they share their thoughts on developments in some of the important sub-sectors of the U.S. economy.
National Economic Outlook – May 2017
May 12, 2017
By Ingo WinzerI noted last month that the number of jobs in the retail sector, while still higher than a year ago, is only growing very slowly. Statistics from April point to the same disconcerting conclusion, so we’ll now examine more closely what’s going on here. There are two important reasons: when people buy less stuff, the rest of the economy follows; and, retail is one of the last sectors where people with no special skills can find a job. Retail provides 11 percent of all jobs in the US.
The rate of growth in retail jobs was 1.4 percent in January, 0.8 percent in February, and 0.3 percent in both March and April. Is this because people are buying less stuff? Very likely. Sure, internet sales are up but internet sales are still only ten percent of retail sales. For the first three months of the year, retail sales in dollars were up 4 percent, but subtract inflation of 2.5 percent and sales are pretty meager – concentrated in cars (bought on credit), furniture (bought on credit), gas (prices are higher), drugs (paid by insurance), and building materials (mainly bought by businesses). People are buying less real consumer stuff – food and clothes.
Measuring things is difficult, so statistics aren’t always correct. It’s too early to conclude the economy is in trouble. But a few more months of this trend and I’ll be willing to stand up and start shouting.
Overall, the number of jobs in April was up 1.4 percent from last year, the LOWEST rate of growth since the last recession. Jobs were essentially flat in manufacturing and retail, up 2 percent in finance, 3 percent in business services, 2 percent in healthcare and at restaurants. The government is a non-player. Unemployment fell to a low 4.4 percent in April.
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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