National Economic Outlook - June 2017

Written By:
Ingo Winzer, President

Local Market Monitor

Continuing the trend of recent months, in May the number of jobs in retail sales was no better than last year. This very worrying development isn't really so surprising because we've seen that the income of consumers has barely increased for years, while the amount of debt they're carrying has grown. At some point that has to translate into less spending.

Other parts of the economy are still doing well. Jobs in business services, for example, are growing at a faster rate than last year. Jobs in healthcare are growing at a slower rate, but still at a good clip - and growth seems to be fine in finance, construction and at restaurants. Ok, jobs aren't growing in manufacturing or government - almost a quarter of the economy - but they haven't for a while. So why is the poor showing in retail now so important? Because it's a LEADING indicator.

Jobs in healthcare didn't even feel the 2008 recession until 2009, jobs in business services were still doing fine in late 2007. But jobs in retail had already sputtered in 2006, well before the crash in early 2008. Stay tuned.

Overall, jobs in May were 1.5 percent higher than last year. This seems to be the new normal in 2017, as 1.8 percent was the new normal in 2016. Jobs were up 3 percent in construction, flat in manufacturing, flat in retail, up 2 percent in finance, 3 percent in business services, 2.3 percent in healthcare, 2 percent at restaurants, and a half percent in government.

Unemployment is at a low 4.3 percent, whatever that means these days when many people have just dropped out of the regular workforce.