Recession Is Here—or Maybe Not?

Strong jobs data complicates narrative that U.S. economy is in a downturn.

It isn’t every day you hear an economist refer to market conditions as “bizarre.” Yet that was how Lawrence Yun, chief economist for the National Association of REALTORS®, described them at the Real Estate Forecast Summit in late July.

Data in late July indicated the country had moved into a mild recession, yet Yun said strong employment numbers were painting a different picture.

“If it is a recession—and we won’t know that for 12 to 18 months—it is quite a bizarre recession because we have a labor shortage,” Yun said. In addition to analyzing data, Yun likes to get a feel for markets by walking the streets and looking for Help Wanted signs and vacancies. “Help Wanted signs are pretty much everywhere,” he said, noting that the ratio of job openings to people who are unemployed is almost 2:1.

COVID-19 Drop Outs

“To be unemployed, one has to be searching for a job,” Yun explained. But this time around, many people who don’t have jobs aren’t looking for them.

“What we find is that in April 2020, essentially 6 million Americans left the labor force,” Yun said. “They said, ‘I don’t want to catch COVID. Therefore, I’m just going to stay home and not participate in the labor force.’ ” And even though many of those people have gone back to work, as of July there were still 3 million additional people who weren’t even looking for work.

One area experiencing a major labor shortage: construction—whether for multifamily, warehouses, or single-family homes. “You can see record-high job openings in the construction sector,” Yun said.

State and Regional Variation

Right before COVID-19, slightly more than 150 million Americans had payroll jobs, meaning they received W-2 statements. Jobs declined during the initial shutdown but were added each month afterward, Yun said.

“Now we have almost the same number of W-2 payroll jobs, but we see a huge variation across the country,” Yun noted. “If we compare the number of jobs in Texas in June 2022 versus March 2020, immediately before COVID, there are 4.1% more jobs today. But in New York, there are 2.9% fewer jobs. Generally, the Rocky Mountain and Southern states have turned positive, while other places across the country are struggling—almost back to normal but not there yet.”

Jobs in the US: Now vs Prepandemic Days, June 2022 vs March 2020


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