Local Market Monitor’s National Economic Outlook for October ’24

Local Market Monitor, a National REIA preferred vendor, recently released their monthly National Economic Outlook where they share their thoughts on developments taking place in the U.S. economy.  Interestingly, Ingo points out that the jobs picture isn’t as rosy as it’s being portrayed.

National Economic Outlook
By Ingo WInzer

October, 2024

Despite optimistic reports over the 250,000 new jobs in September, the stark reality is that the increase in jobs from last September is just 1.5 percent, the lowest so far this year.

And even that low number has a lot more to do with re-hiring rather than the creation of new jobs that drive the economy forward. Most of the increase was in the government and healthcare sectors.

Looking down the road, it’s difficult see where economic growth will come from next year. Employment in the manufacturing sector has been flat. Jobs in finance, retail, and business services – one of the largest sectors of the economy – are increasing at less than half a percent. Jobs are doing better in construction but it’s a fairly small sector, and the re-hiring surge at restaurants is now over. All of these sectors will do better as interest rates come down but that won’t happen very quickly.

We’re looking at a sluggish economy in 2025. Maybe that’s not too surprising because the US population is no longer growing at even one percent per year, which used to be the norm. The increase in 2023 was just a half percent.

One other thing to worry about is the continuing rapid growth of the healthcare sector, which now accounts for 11 percent of all jobs and 17 percent of gross domestic product – one out of every six dollars. Money spent on healthcare is money that can’t be spent on other things. And above a certain level, more healthcare doesn’t produce better health, just a transfer of money from some people to other people. Right now healthcare is the only major sector of the economy with strong job growth.

The 1.5 percent increase in jobs in September, compared to last year, includes 2.8 percent in construction, -0.2 percent in manufacturing, 0.4 percent in retail, 0.4 percent in finance, 0.4 percent in business services, 3.9 percent in healthcare, 1.7 percent at restaurants, and 2.1 percent in government.

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