National Economic Outlook

Written By:

Ingo Winzer, President

Local Market Monitor

The economy continues to improve at the same moderate rate we've seen in recent months, with total jobs up 1.6 percent over last year. Jobs grew 0.7 percent in manufacturing, 1.7 percent in retail trade, 2.0 percent in health care, 3.1 percent at restaurants, and 3.4 percent in business services. The slow growth in manufacturing is a disappointment, but a reflection of the sorry state of the global economy, which currently doesn't need more airplanes or mining equipment.

 

Jobs in the government sector decreased 0.4 percent, 70,000 jobs at the federal level. This is small potatoes compared to the 2 million jobs gained overall, but the impact of lower government spending is much greater than the loss of government jobs. The gross domestic product, adjusted for inflation, grew at a 2.5 percent annual rate in the first quarter of this year, but would have grown at a 3.3 percent annual rate if government spending had just remained flat, never mind providing any stimulus. In the last quarter of 2012, lower government spending took 1.5 percent off GDP. If government continues a drag on the economy, we're looking at very modest grow in the next few years.