National Economic Outlook - April 2017

Written By:
Ingo Winzer, President

Local Market Monitor

Because the government reports such detailed statistics about the economy, we can think of developments in some subsectors as leading indicators of what will happen with the overall economy in the near future. For example, we closely watch the number of jobs in truck transport and temporary help because we think these are quickly affected by a slowdown of demand. But the data for these subsectors, which are around one percent of all jobs, can vary a lot from month to month, so you can't always be sure what they're telling you.

An even closer connection to demand is the number of jobs in retail stores. This subsector is much larger - about ten percent of all jobs - and if the data from the last few months can be believed, it's telling us that we will see a significant slowdown sooner rather than later. In March, the annual rate of growth in retail jobs was 0.3 percent - compared to 1.4 percent in January and 1.7 percent a year ago. TV reports tell us this is just because more people are buying on-line, total demand remains the same. But people have been buying on-line for a long time, so I wouldn't bet on that as the full explanation. The numbers may vary from month to month, but I'll be watching the retail job figures very closely this year.

Largely because of the slow growth in retail, overall job growth in March was 1.5 percent - the slowest rate in five years. Jobs were up 0.3 percent in manufacturing, 2.2 percent in finance, 3.2 percent in business services, 2.3 percent in healthcare and 1.9 percent at restaurants. Unemployment was a low 4.5 percent.