Wednesday, December 27, 2017

National Economic Outlook - December 2017

Written By: Ingo Winzer, President of Local Market Monitor, Inc.

In previous economic cycles, the performance of the US economy could be measured by the growth or decline in jobs. No more. By measures like corporate profits or GDP, the economy is doing well today, but job growth keeps slowing down. What gives?

In a word, computers. The greater use of computers and information technology keeps displacing workers. This phenomenon isn't new - computer-controlled machines have been around a long time - but has accelerated with the build-out of the internet. Ironically, one of the strongest effects can be seen in the information sector itself, where jobs are down 2 percent over the past year. We all know that newspapers have been losing jobs, but that now extends to the movie and TV industries and to telecommunications.

It's difficult to know where this process will end. What will these displaced workers do instead? They can't all be retrained for high-tech jobs, especially since high-tech jobs themselves will eventually be relentlessly pared down.

In the meantime, the real estate industry is likely to follow the auto industry, where more and more vehicles are leased because fewer customers can afford to buy.


In November, jobs were up 1.4 percent from last year. Jobs were up 1.5 percent in manufacturing,1.8 percent in finance, 2.7 percent in business services, 2 percent in healthcare, and 2.1 percent at restaurants. Jobs in retail and government were flat. The unemployment rate is bumping along at 4.1 percent.

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