January 11, 2022
The economy looks like it’s just about back to where we were before the pandemic hit, although with some big changes. The number of jobs in December was just a half percent lower than in February of 2020. That’s not much different from November, probably because the omicron variant has again affected many businesses, but it’s a good sign for 2022 that jobs have climbed out of the deep pit of the pandemic.
That said, some sectors of the economy – notably healthcare and government – apparently have lost a large number of jobs for good; half a million in healthcare, a million in government. There’s been no improvement in these sectors in the past year, so we must consider the current status their new baseline. And even though a lot of jobs have returned in the restaurant business, the half million still missing probably won’t be back in 2022.
Jobs in construction and retail are back to the pre-pandemic level but it doesn’t look like they’ll increase much in the next year. It’s mainly in the large business services sector and smaller ones like finance, transport and warehousing that jobs are now at a higher level.
The gains in two business services give a clue to how the economy may grow in 2022. It’s not a surprise that jobs in computer systems design are again rapidly increasing; that was a trend well before the pandemic. More intriguing is the recent recovery of jobs supplied by temp agencies; it may just be the usual seasonal hiring before Christmas, or it may indicate the extent to which more people and businesses now want temporary work and workers as a response to the pandemic. Possibly a bit of each, but if temporary work – much of it remote – grows rapidly in 2022 it will have lasting effects on real estate markets.
Meanwhile, let’s not forget the home price surge. New data next month will tell if it’s building or fading, which will have a big impact on real estate investors.