National Economic Outlook - August 2016

Written By:
Ingo Winzer, President

Local Market Monitor

Despite the best efforts of government officials to pull the right levers, the US economy still runs in cycles. In fact, it seems prone to bigger swings despite more regulation of the details of business - a sort of forest-and-trees situation.

While it's too soon to panic, one coal mine canary has signaled that the cycle is again turning. Over the last few months, the number of new temp jobs has slowed sharply. This used to be mainly secretaries but now includes anything from computer programmers to machine operators. There are more than 3 million of them and they are the tide in our outsource economy, easily ebbing and flowing with business needs - and foretelling the last three recessions. Last year they increased 4 percent, this year just 1 percent. We'll keep an eye on this.

Jobs in July were up 1.7 percent over last year, confirming the slower growth we've seen the last few months. Jobs were flat in manufacturing and government, up 2 percent in retail trade, 2.6 percent in business services, 2.6 percent at restaurants, and 3 percent in healthcare. Unemployment remains at 4.9 percent.

Finally reacting to higher home prices and rents, the construction sector added 200,000 jobs in the past year. A slower economy would crimp that expansion, which would put current property holders in a strong position for years.