Boston Real Estate Investors Association

Local Market Monitor’s National Economic Outlook for March ’23

March, 2023

The number of jobs in February was 2.9 percent higher than last year, normally an indicator of strong economic growth, but the increase was 3.3 percent in January, 3.5 percent in December. The rate of improvement is slowing down, which probably means that we’re still counting pandemic recovery jobs as new jobs, and we don’t really know how weak or strong the economy is.

If we compare jobs to the level just before the pandemic, the increase is 1.9 percent, not much growth in three years – especially since covid restrictions are long gone. In retail, restaurants and government, the number of jobs is still lower than before the pandemic.

Half of the total growth in jobs in the last three years is due to the business services sector, which is a worry in itself because business services can only grow if other businesses grow, and we haven’t seen much evidence for that. Compared to last year, business services jobs were up 2.7 percent in February, down from 3.2 percent in January and 4.6 percent in December.

Meanwhile jobs were up 3.2 percent in construction, 2.6 percent in manufacture, 1.4 percent in finance, 3.7 percent in healthcare, 5.6 percent at restaurants, and 1.9 percent in government. Retail jobs were flat.

The unsure economic situation is not much help for real estate markets, where the prospect of a broad downturn in home prices is getting stronger. Compared to last year, prices in the fourth quarter of 2022 were still higher by 12 percent, but since the peak of prices in June, they’re down 3 percent nationwide, and 7 percent in the Mountain and Pacific states.

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