National Economic Outlook - May 2018

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

Like most people, I'm most confident talking about an economy that produces physical things like airplanes or soybeans or TV shows, or even data. I'm less sure when it comes to financial activities that place a value on things like stocks, sub-prime mortgages, credit card debt or real estate.

So, while I'm happy that the manufacturing part of our economy is adding jobs at a good clip, I'm less happy that the same is true for the financial sector. The added jobs are a good thing, but the expanding activity makes me nervous, especially because computers magnify financial effects these days.

The government also worries about the financial sector, which is why it's let the big banks get bigger - easier to regulate a few. But their concern is just that banks follow the rules, while my worry is that perfectly legal activities will - once again- blow up in our faces. And - once again - it will be the real estate sector (homeowners included) that gets hit the hardest. The greater concentration of jobs and real estate value in a smaller number of big markets is itself a risk we haven't seen before.

Jobs in March were up 1.6 percent from last year, same as previous months. Jobs were up 2 percent in manufacturing, 1.5 percent in finance, 2.6 percent in business services, 2 percent in healthcare, and 2 percent at restaurants. Jobs were up slightly in retail, and flat in government. Unemployment was down a touch.