The Wall Street Journal this week said, Grim Job Report Sinks Markets. The bold headline suggests an economy in retreat. After all, it's an election year. But the May job numbers look like more of the same moderate growth we've been getting in recent months.
Overall, jobs were up 1.4 percent in the past year, right in line with the growth rates of previous months. Manufacturing jobs were up 2 percent, including an 8 percent increase in cars. Retail jobs were up just 1 percent but, significantly, jobs at furniture stores were up 2.4 percent. Jobs at restaurants and bars were up 3 percent. Conclusion: consumers are buying big-ticket items and are treating themselves to small luxuries, important signs of optimism.
Business service jobs were up 3 percent and health care jobs up 2.5 percent, very good numbers for fundamental parts of the economy. Government jobs were down 0.6 percent, mainly at the local level.
Our Housing Demand Index and the Consumer Credit numbers reinforce the idea that the housing market is growing because consumers are again willing to borrow money. Home prices, though down 1.4 percent on average in the last 12 months, were higher in a third of the 315 markets we cover.
Consumers hold the economy in their hands, and they are still cautious. A large number of them are still unemployed. But my bet is that they will accelerate their buying during the next year and finally produce a real estate recovery.
What do you think about the national economic outlook?
