Local Market Monitor’s National Economic Outlook for November ’22
National Economic Outlook
By Ingo Winzer
Recent data about more jobs and an improving Gross Domestic Product suggest an economy that’s doing well and that will do even better once inflation comes down. But a closer look at other statistics gives a less upbeat picture.
Productivity, the output per worker, which reached a high level during the pandemic when many people worked from home, fell sharply as offices and businesses reopened, and in the last two quarters was actually negative. This may just be an adjustment after such a strange recession but it could also mean that more jobs don’t necessarily mean a better economy.
GDP was up in the third quarter but adjusted for inflation it was no higher than in the fourth quarter of 2021 and only 4 percent higher than in the fourth quarter of 2019, almost three years ago.
Combined with the latest population estimate of just a third percent increase in 2022, and with inflation taking a bigger bite out of consumers’ pockets, we’re probably looking at an economy that’s just going sideways.
Compared to last year, jobs in October were up 3.6 percent, including 3.6 percent in construction, 3.7 percent in manufacturing, 1.9 percent in retail, 1.7 percent in finance, 4 percent in business services, 3.2 percent in healthcare, 6.9 percent at restaurants and 1.2 percent in government.
In normal times this is good growth but it’s possible that we’re just in a late phase of the pandemic, with jobs still recovering instead of actually growing.
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