August 15, 2019

The data on Gross Domestic Product for the second quarter are as unenlightening as always. The 2.1 percent annualized growth over the first quarter was a combination of heavy consumer spending, cuts in company inventories, a drop in exports, and strong government spending.

The previous quarter it was poor consumer spending, higher inventories, and higher exports. Go figure.

The job data, on the other hand, are consistent with what we’ve been seeing for several months: a slower rate of growth. Jobs in July were up 1.5 percent from a year ago, the same as in May and June, and down from the 1.8 percent that prevailed earlier this year. This isn’t yet a cause for concern, but a further drop to 1.3 percent would be. We’re at a point where there isn’t much wiggle room.

Jobs were up 2.5 percent in healthcare, 2.2 percent in business services, 2.1 percent at restaurants, 1.2 percent in finance and 1.2 percent in manufacturing. Retail jobs were slightly down, government jobs slightly up.

Jobs in construction were up 2.7 percent, which seems like a lot but isn’t; last year it was 4.8 percent. I have a strong suspicion that home builders in urban markets concentrated on the upper end of the market and it’s now softening.