December 14, 2020
Way back in April, when the coronavirus hit and many states shut down, the number of jobs in the economy dropped 13 percent – 20 million people. As the months went by that number reduced to 10 million but the pace of improvement got slower and slower until now, for November, there was no improvement at all from the previous month.
It would be nice to think that as people get vaccinated the job losses will abate entirely but I’m not so sure. Even before the pandemic businesses were providing more direct-to-consumer services and learning how to operate with fewer employees. Now that process has accelerated. If those 10 million people can’t find a good job, the effects on real estate markets (and society) will be severe.
Even as the job numbers remain dismal, consumer spending has recovered and the number of owner-occupied homes rose 6 million from last year and home prices were up 5 percent. For many people the recession is already over. For those with lower-paying jobs – overwhelmingly renters – it will continue for a long time.
Overall, compared to last year, jobs in November were down 6 percent, including losses of 5 percent in manufacturing, 4 percent in retail, 1 percent in finance, 5 percent in business services, 3 percent in healthcare, 16 percent at restaurants, and 5 percent in government.