Local Market Monitor’s National Economic Outlook for August 2021
National Economic Outlook
By Ingo Winzer
The economy continues to improve but apparently not fast enough to bring jobs back into positive territory by the end of the year. There are still 4 million fewer jobs than before covid.
In some sectors of the economy, like construction and finance, jobs are already above pre-pandemic levels; but a million are still missing in healthcare/education and a million at restaurants. This may be the new normal because of the large number of people who refuse to get vaccinated. Public health measures were largely accepted at the start of the pandemic, when 20 million jobs disappeared overnight; they’re less well received now that the number is reduced to 4 million and vaccination has become a political issue.
But as long as the pandemic continues, businesses like restaurants and tourism will see fewer visitors and companies will be reluctant to hire people who are unvaccinated.
The economy is doing better – in the second quarter, Gross Domestic Product finally inched above the pre-pandemic level – but the hardening positions on vaccination are likely to hinder further progress. This will mean slow job growth, slow income growth and (despite the recent surge of home buying) slow demand for housing.
In July – compared to pre-pandemic levels – jobs were up 5 percent in construction and 1 percent in finance. Jobs were virtually flat in retail and business services, and down 2.2 percent in manufacturing, 2.6 percent in healthcare, 3.6 percent at restaurants, and 2.6 percent in government.
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