One
of the bright spots of the economy is the financial sector. For the last
several years jobs in finance increased at a steady pace of almost 2 percent
per year; there are now almost a million more than in 2010. These are mainly
well-paid jobs - over $70,000 per year - that boost the real estate market.
While
these jobs still increased 1.6 percent in 2017, this is slower growth than just
last year. Because these jobs are associated with individual transactions in
banking, wealth management, debt management, insurance, and real estate itself,
they are very susceptible to automation and internet replacement.
With
ballooning personal debt on one side and high invested wealth on the other, the
financial sector is larger than ever, but the future of jobs in finance is
likely to be less rosy. This by itself isn't bad for real estate, it's just
another indicator of the future tilt towards more renting.
The
ascent of the financial sector is itself a potential liability because it's
built on ever larger amounts of debt. The last time around, Wall Street offered
good returns through securities backed by risky mortgages. The same pressures
for high returns can easily produce similar risks when so much other debt is
floating around.
Jobs
in December were up 1.5 percent from last year, in line with recent growth
levels. Manufacturing jobs were up 1 percent, jobs in retail and government again
were flat. Jobs were up 2.5 percent in business services, 2 percent in
healthcare, and 2 percent at restaurants. Unemployment remains at 4.1 percent.
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