National Economic Outlook - July 2017

Written By:
Ingo Winzer, President

Local Market Monitor

Jobs in retail sales were flat again in June. What's going on here? I've been harping on this for a few months but the picture still isn't clear. Is the lack of growth in retail jobs an indicator that growth is slowing down? Or does it just mean that we're buying more stuff on-line?

In dollars, retail sales (including on-line) increased 4 percent in 2014, 3 percent in 2015, 3 percent in 2016, and 4 percent so far this year. So, there isn't a downward trend in spending, at least not in the past few years,. But this IS slower spending than the 5 and 6 percent increases we used to have. What we're probably seeing is a combination - more internet sales, but also a SHIFT in spending, mainly by people whose income has been flat. Consider that 40 percent of renters pay more than a third of their income for housing, and a bunch of the rest now goes for phone and internet service.

All of this doesn't completely answer our question, because the lack of new jobs in retail - the lowest paying part of the economy - isn't being made up elsewhere. While internet sales did increase, we're ALSO seeing a slowing of overall growth. Jobs in June overall were up 1.5 percent from last year - flat in manufacturing, retail and government, but up 3 percent in business services, 2 percent in healthcare, and 2 percent at restaurants.