October 14, 2021
The economy continues to improve, although at such a slow rate that we’ll be lucky to just get back to zero by the end of the year – the number of jobs that existed before the pandemic began.
This is partly because of the large number of people who have not been vaccinated and partly because some of the jobs that were lost will be lost for good; the economy has evolved, as it always does, to adopt new ways of doing business.
We know that vaccinations are the major problem because the types of jobs still most affected are those that involve people gathering together: restaurants, schools, hospitals, factories. And in response, these are the types of businesses most likely to retool how they operate in order to need fewer employees in the future.
This will have lasting effects on real estate because there will be lower demand for housing in markets that have a higher concentration of such jobs. College towns, tourist destinations and healthcare centers, for example, that formerly boasted solid job growth, will have slower growth in the future. That doesn’t mean they’re not good places to invest, just that the investment strategy has to be different.
Overall, jobs in September were down 2.2 percent from before the pandemic. Jobs were down 2.1 percent in manufacturing, 0.6 percent in retail, 3 percent in healthcare, 3.2 percent in government and 5 percent at restaurants. On the positive side, jobs were up 0.3 percent in both finance and the very important business services sector.
Jobs were up 4.8 percent in construction. This seems like a lot but for construction it’s not. This is one reason why I believe the recent surge in home prices won’t have a lasting effect; there isn’t a groundswell of demand for more homes.