U.S. Adds 339,000 Jobs in May

2023-06-02T11:20:50-05:00

Job growth accelerated in May. Total payroll employment rose by 339,000 and the unemployment rate rose to 3.7%. While labor demand remained strong, wage pressures eased from a year ago. In May, wage growth slowed to a 4.3% year-over-year gain, from 4.4% last month, and down 1.6 percentage points from a 5.9% gain in March 2022. Total nonfarm payroll employment increased by 339,000 in May, following a gain of 294,000 in April, as reported in the Employment Situation Summary. It marks the largest monthly gain in the past four months. The estimates for the previous two months were revised up. The estimate for March was revised up by 52,000 from +165,000 to +217,000, while the April increase was revised up by 41,000, from +253,000 to +294,000. Despite tight monetary policy, nearly 5.1 million jobs have been created since March 2022, when the Fed enacted the first interest rate hike. In the first five months of 2023, more than 1.6 million jobs were created, and monthly employment growth averaged 314,000 per month. The unemployment rate increased by 0.3 percentage points to 3.7% in May. The number of unemployed persons increased by 440,000, while the number of employed persons decreased by 310,000. Meanwhile, the labor force participation rate, the proportion of the population either looking for a job or already holding a job, was unchanged at 62.6% in May. Moreover, the labor force participation rate for people who aged between 25 and 54 rose to 83.4%. While the overall labor force participation rate is still below its pre-pandemic levels at the beginning of 2020, the rate for people who aged between 25 and 54 exceeds the pre-pandemic level of 83.1%. For industry sectors, professional and business services (+64,000), government (+56,000), and health care (+52,000) led job gains in May. Employment in the overall construction sector increased by 25,000 in May, following a 13,000 gain in April. While residential construction added 2,500 jobs, non-residential construction employment gained 22,100 jobs in May. Residential construction employment now stands at 3.3 million in May, broken down as 933,000 builders and 2.3 million residential specialty trade contractors. The 6-month moving average of job gains for residential construction was 1,667 a month. Over the last 12 months, home builders and remodelers added 39,100 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 1,278,500 positions. In May, the unemployment rate for construction workers increased by 0.3 percentage points to 3.8% on a seasonally adjusted basis. The unemployment rate for construction workers has been trending lower, after reaching 14.2% in April 2020, due to the housing demand impact of the COVID-19 pandemic. Related ‹ Private Residential Construction Spending Rises in AprilTags: employment, labor force, labor force participation rate, residential construction employment, wage

U.S. Adds 339,000 Jobs in May2023-06-02T11:20:50-05:00

Home Prices Rebound in March

2023-05-30T13:14:37-05:00

After seven consecutive months of decline, home prices climbed for a second straight month in March as low inventory levels persist. Locally, five metro areas, reported by S&P Dow Jones Indices, experienced negative home price appreciation in March. The S&P CoreLogic Case-Shiller U.S. National Home Price Index, reported by S&P Dow Jones Indices, rose at a seasonally adjusted annual growth rate of 5.1% in March, following a 3.6% increase in February. After a decade of growth, home prices declined for seven consecutive months from July 2022 to January 2023, driven by elevated mortgage rates and weakening buyer demand. Nonetheless, national home prices are now 62% higher than their last peak during the housing boom in March 2006. On a year-over-year basis, the S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index posted a 0.7% annual gain in March, down from 2.1% in February. Year-over-year home price appreciation slowed for the twelfth consecutive month. Meanwhile, the Home Price Index, released by the Federal Housing Finance Agency (FHFA), rose at a seasonally adjusted annual rate of 7.7% in March, following an 8.8% increase in February. On a year-over-year basis, the FHFA Home Price NSA Index rose by 3.7% in March, down from 4.3% in the previous month. In addition to tracking national home price changes, S&P Dow Jones Indices reported home price indexes across 20 metro areas in March. In March, local home prices varied and their annual growth rates ranged from -10.3% to 18.5% in March. Among the 20 metro areas, nine metro areas exceeded the national average of 5.1%. Detroit, New York and San Diego had the highest home price appreciation. Detroit led the way with an 18.5% increase, followed by New York with a 13.9% increase and San Diego with a 12.7% increase. Compared to the previous month, home prices in five metro areas declined in March. They were Dallas (-1.5%), Cleveland (-2.7%), Las Vegas (-4.2%), Phoenix (-4.5%) and Seattle (-10.3%). Related ‹ Rates on Development and Construction Loans Continue to ClimbTags: FHFA Home Price Index, home prices, S&P CoreLogic Case-Shiller Home Price Index

Home Prices Rebound in March2023-05-30T13:14:37-05:00

Employment Situation in April: State-Level Analysis

2023-05-19T14:18:16-05:00

Nonfarm payroll employment increased in 36 states in April compared to the previous month, while 14 states and the District of Columbia lost jobs. According to the Bureau of Labor Statistics, nationwide total nonfarm payroll employment increased by 253,000 in April, following a gain of 165,000 jobs in March. On a month-over-month basis, employment data was strong in California, which added 67,000 jobs, followed by Texas (+33,300), and Florida (+21,200). Fourteen states and the District of Columbia lost a total of 39,000 jobs.  In percentage terms, employment in Indiana increased by 0.5% while Rhode Island reported a 0.8% decline between March and April. Year-over-year ending in April, 4.0 million jobs have been added, marking a more than full recovery of the labor market from the COVID-19 pandemic induced recession. Except for Rhode Island, all the other states and District of Columbia added jobs compared to a year ago. The range of job gains spanned 534,600 jobs in Texas to 1,800 jobs added in West Virginia. In percentage terms, Nevada reported the highest increase by 4.2%, while Rhode Island decreased by 0.2% compared to a year ago. Across the 48 states which reported construction sector jobs data—which includes both residential as well as non-residential construction— 24 states reported an increase in April compared to March, while 24 states lost construction sector jobs. Washington added 4,300 construction jobs, while Texas lost 8,500 jobs. Overall, the construction industry added a net 15,000 jobs in April compared to the previous month. In percentage terms, South Dakota increased by 2.7% while Alaska reported a decline of 4.2% between March and April. Year-over-year, construction sector jobs in the U.S. increased by 205,000, which is a 2.7% increase compared to the April 2022 level. Texas added 28,000 jobs, which was the largest gain of any state, while California lost 5,100 construction sector jobs. In percentage terms, Arkansas had the highest annual growth rate in the construction sector by 9.8%. Over this period, West Virginia reported a decline of 3.7%. Related ‹ Custom Home Building ContractsTags: construction labor, economics, state and local markets, state employment

Employment Situation in April: State-Level Analysis2023-05-19T14:18:16-05:00

Solid Job Growth in April

2023-05-05T10:21:19-05:00

Job gains continued in April, despite rising interest rates and a slowing economy. After a revised 165,000 job gain in March, total nonfarm payroll employment increased by 253,000 in April, and the unemployment rate declined to 3.4% from 3.5% in March. In April, on a year-over-year basis, wage growth increased slightly to 4.4% from 4.3% last month, but down compared to a 5.8% gain in April 2022. Construction industry employment (both residential and non-residential) totaled 7.9 million and exceeds its February 2020 level. While residential construction added 14,200 jobs, non-residential construction employment gained 800 jobs in April. Residential construction employment exceeds its level in February 2020, while all non-residential construction jobs lost in March and April 2020 have now been recovered. Total nonfarm payroll employment increased by 253,000 in April, following a gain of 165,000 in March, as reported in the Employment Situation Summary. The estimates for the previous two months were revised lower. The estimate for February was revised down by 78,000 from +326,000 to +248,000, while the March increase was revised down by 71,000, from +236,000 to +165,000. Despite tight monetary policy, over 4.7 million jobs have been created since March 2022, when the Fed enacted the first interest rate hike. The unemployment rate edged down to 3.4% in April. The number of employed persons increased by 139,000, while the number of unemployed persons decreased by 182,000. Meanwhile, the labor force participation rate, the proportion of the population either looking for a job or already holding a job, was unchanged at 62.6% in April. Moreover, the labor force participation rate for people who aged between 25 and 54 rose to 83.3%. While the overall labor force participation rate is still below its pre-pandemic levels at the beginning of 2020, the rate for people who aged between 25 and 54 exceeds the pre-pandemic level of 83.1%. For industry sectors, employment in professional and business services (+43,000), health care (+40,000), and leisure and hospitality (+31,000) continued to trend up in April. Employment in the overall construction sector increased by 15,000 in April, following an 11,000 loss in March. While residential construction added 14,200 jobs, non-residential construction employment gained 800 jobs in April. Residential construction employment now stands at 3.3 million in April, broken down as 930,000 builders and 2.3 million residential specialty trade contractors. The 6-month moving average of job gains for residential construction was 1,583 a month. Over the last 12 months, home builders and remodelers added 57,000 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 1,279,800 positions. In April, the unemployment rate for construction workers decreased by 0.8 percentage points to 3.6% on a seasonally adjusted basis. The unemployment rate for construction workers has been trending lower, after reaching 14.2% in April 2020, due to the housing demand impact of the COVID-19 pandemic. Related ‹ Unaffordable Prices Are Most Common Reason Buyers Can’t Make PurchaseTags: employment, labor force, labor force participation rate, residential construction employment, wage

Solid Job Growth in April2023-05-05T10:21:19-05:00

Economic Growth Weakens in the First Quarter

2023-04-27T14:15:29-05:00

In the first quarter of 2023, economic growth slowed to an annual rate of 1.1%, amid rising interest rates and an ongoing banking crisis. This quarter’s growth was dragged down by decreases in private inventory investment and residential fixed investment. Private inventory investment subtracted 2.26 percentage points off the headline growth rate for overall GDP, while residential fixed investment took 0.17 percentage points off the headline number. Meanwhile, the GDP price index rose 4.0% for the first quarter, up from a 3.9% increase in the fourth quarter. The Personal Consumption Expenditures (PCE) price Index, capturing inflation (or deflation) across a wide range of consumer expenses and reflecting changes in consumer behavior, rose 4.2% in the first quarter, compared with a 3.7% increase in the fourth quarter of 2022. Looking forward, only a mild recession is expected for this cycle due to the Federal Reserve tightening financial conditions. According to the “advance” estimate  released by the Bureau of Economic Analysis (BEA), real gross domestic product (GDP) increased at an annual rate of 1.1% in the first quarter of 2023. It was down from a 2.6% increase in the fourth quarter of 2022 and marks the lowest growth rate in the past three quarters. This quarter’s growth was close to NAHB’s forecast of a 1.0% increase. This quarter’s increase reflected increases in consumer spending, exports, government spending, and nonresidential fixed investment, partially offset by decreases in private inventory investment and residential fixed investment. Consumer spending rose at an annual rate of 3.7% in the first quarter, reflecting increases in both services and goods. While expenditures on services increased 2.3% at an annual rate, goods spending increased 6.5% at an annual rate, led by motor vehicles and parts (+45.3%). This quarter’s increase in exports reflected an increase in goods that was partly offset by a decrease in services. Meanwhile, federal government spending increased 4.7% in the first quarter, led by an increase in nondefense spending, while state and local government spending rose 2.3%, led by an increase in compensation of state and local government employees. Nonresidential fixed investment increased 0.7% in the first quarter, down from a 4.0% increase in the fourth quarter. Additionally, residential fixed investment (RFI) decreased 4.2% in the first quarter. This was the eighth consecutive quarter for which RFI subtracted from the headline growth rate for overall GDP. Within residential fixed investment, single-family structures declined 20.7% at an annual rate, multifamily structures rose 10.1% and other structures (specifically brokers’ commissions) increased 6.3%. Related ‹ Housing Availability Expectations See Mild ImprovementHousing Share of GDP Lower in the First Quarter of 2023 ›Tags: economics, gdp, inflation, macroeconomics, macroeconomy, residential fixed investment

Economic Growth Weakens in the First Quarter2023-04-27T14:15:29-05:00

Employment Situation in March: State-Level Analysis

2023-04-27T15:21:12-05:00

Nonfarm payroll employment increased in 36 states and the District of Columbia in March compared to the previous month, while 14 states lost jobs. According to the Bureau of Labor Statistics, nationwide total nonfarm payroll employment increased by 236,000 in March, following a gain of 326,000 jobs in February. On a month-over-month basis, employment data was strong in Texas, which added 28,600 jobs, followed by New York (+18,100), and Massachusetts (+16,300). Fourteen states lost a total of 22,400 jobs.  In percentage terms, employment in Delaware increased by 0.5% while Alaska reported a 0.4% decline between February and March. Year-over-year ending in March, 4.1 million jobs have been added, marking a more than full recovery of the labor market from the COVID-19 pandemic induced recession. All the states and District of Columbia added jobs compared to a year ago. The range of job gains spanned 575,100 jobs in Texas to 2,000 jobs added in West Virginia. In percentage terms, Nevada reported the highest increase by 5.0%, while West Virginia increased by 0.3% compared to a year ago. Across the 48 states which reported construction sector jobs data—which includes both residential as well as non-residential construction— 19 states reported an increase in March compared to February, while 26 states lost construction sector jobs. Three states remained unchanged. Texas added 5,800 construction jobs, while California lost 8,200 jobs. Overall, the construction industry lost a net 9,000 jobs in March compared to the previous month. In percentage terms, Kentucky increased by 3.1% while Connecticut reported a decline of 2.9% between February and March. Year-over-year, construction sector jobs in the U.S. increased by 196,000, which is a 2.5% increase compared to the March 2022 level. Texas added 41,200 jobs, which was the largest gain of any state, while California lost 7,300 construction sector jobs. In percentage terms, Rhode Island had the highest annual growth rate in the construction sector by 11.9%. Over this period, West Virginia reported a decline of 7.5%. Related ‹ Market in Focus: Florida Has Highest Population Growth Rate In U.S.Lower Rates Spark Housing Demand ›Tags: construction labor, economics, state and local markets, state employment

Employment Situation in March: State-Level Analysis2023-04-27T15:21:12-05:00

Inflation Shows Further Signs of Cooling

2023-04-12T10:22:53-05:00

Consumer prices in March saw the smallest year-over-year gain since May 2021 with a ninth consecutive month of a deceleration. While the shelter index (housing inflation) experienced its smallest monthly gain since November 2022, it continued to be the largest contributor to the total increase, accounting for over 60% of the increase. The Fed’s ability to address rising housing costs is limited as shelter cost increases are driven by a lack of affordable supply and increasing development costs. Additional housing supply is the primary solution to tame housing inflation. The Fed’s tools for promoting housing supply are at best limited. In fact, further tightening of monetary policy will hurt housing supply by increasing the cost of AD&C financing. This can be seen on the graph below, as shelter costs continue to rise despite Fed policy tightening. Nonetheless, the NAHB forecast expects to see shelter costs decline later in 2023. The Bureau of Labor Statistics (BLS) reported that the Consumer Price Index (CPI) rose by 0.1% in March on a seasonally adjusted basis, following an increase of 0.4% in February. The price index for a broad set of energy sources fell by 3.5% in March as the gasoline index (-4.6%), the natural gas index (-7.1%) and the electricity index (-0.7%) all decreased.  Excluding the volatile food and energy components, the “core” CPI rose by 0.4% in March, following an increase of 0.5% in February. Meanwhile, the food index was unchanged in March with the food at home index falling 0.3%. Most component indexes continued to increase in February. The indexes for shelter (+0.6%), motor vehicle insurance (+1.2%), airline fares (+4.0%), household furnishings and operations (+0.4%) as well as new vehicles (+0.4%) showed sizeable monthly increases in March. Meanwhile, the indexes for used cars and trucks (-0.9%) and medical care (-0.3%) declined in March. The index for shelter, which makes up more than 40% of the “core” CPI, rose by 0.6% in March, following an increase of 0.8% in February. The indexes for owners’ equivalent rent (OER) and rent of primary residence (RPR) both increased by 0.5% over the month. Monthly increases in OER have averaged 0.6% over the last three months. These gains have been the largest contributors to headline inflation in recent months. During the past twelve months, on a not seasonally adjusted basis, the CPI rose by 5.0% in March, following a 6.0% increase in February. This was the slowest annual gain since May 2021. The “core” CPI increased by 5.6% over the past twelve months, following a 5.5% increase in February. The food index rose by 8.5% while the energy index fell by 6.4% over the past twelve months. NAHB constructs a “real” rent index to indicate whether inflation in rents is faster or slower than overall inflation. It provides insight into the supply and demand conditions for rental housing. When inflation in rents is rising faster (slower) than overall inflation, the real rent index rises (declines). The real rent index is calculated by dividing the price index for rent by the core CPI (to exclude the volatile food and energy components). The Real Rent Index rose by 0.1% in March. Related ‹ Nonrevolving Debt Increases as Auto Loan Rates SurgeTags: cpi, housing costs, inflation, monetary policy

Inflation Shows Further Signs of Cooling2023-04-12T10:22:53-05:00

Residential Building Wage Growth Slowing

2023-04-10T09:16:16-05:00

By Jing Fu on April 10, 2023 • Average hourly earnings for residential building workers* continue to rise in February 2023 but at a slower pace. Wage growth has retreated below or close to 3%, from the highest rate of 2021. Labor market data indicate that business hiring is softening as the economy shows signs of weakening. According to the Bureau of Labor Statistics (BLS) report, average hourly earnings (AHE) for residential building workers were $29.5 in February 2023, increasing 3% from $28.67 a year ago. This was 14.4% higher than the manufacturing’s average hourly earnings of $25.78, 9.2% higher than transportation and warehousing’s, and 12.0% lower than mining and logging’s. Average hourly earnings for residential building workers grew at a relatively slower pace in the first two months of 2023, compared to the previous two years. The year-over-year growth rate reached 8% in October 2021, the highest rate since February 2019, but this rate is now decelerating. Indeed, the construction labor market with a peak in 2022 is now entering a cooling stage as the housing market weakens. Note: * Data used in this blog relate to production and nonsupervisory workers in the residential building industry. This group accounts for approximately two-thirds of the total employment on residential building industry. Related ‹ Job Gains Slow in MarchTags: average hourly earnings, labor market, residential building, wages

Residential Building Wage Growth Slowing2023-04-10T09:16:16-05:00

Job Gains Slow in March

2023-04-07T11:16:11-05:00

Job growth slowed in March, along with higher interest rates and increased economic uncertainty. After a revised 326,000 job gain in February, total nonfarm payroll employment increased by 236,000 in March, and the unemployment rate declined to 3.5% from 3.6% in February. Average hourly earnings have increased by 4.2% on a year-over-year basis. It marks the lowest wage gain since June 2021, suggesting inflationary pressures are easing. Construction industry employment (both residential and non-residential) totaled 7.9 million and exceeds its February 2020 level. Both residential construction (-7,000) and non-residential construction employment (-1,800) saw job losses in March. Residential construction employment exceeds its level in February 2020, while all non-residential construction jobs lost in March and April 2020 have now been recovered. Total nonfarm payroll employment increased by 236,000 in March, following a gain of 326,000 in February, as reported in the Employment Situation Summary. It marks the slowest monthly gain in more than two years. The estimates for the previous two months were revised. The estimate for January was revised down by 32,000 from +504,000 to +472,000, while the February increase was revised up by 15,000, from +311,000 to +326,000. Despite tight monetary policy, over 4.6 million jobs have been created since March 2022, when the Fed enacted the first interest rate hike. The unemployment rate edged down to 3.5% in March. The number of employed persons increased by 577,000, while the number of unemployed persons decreased by 97,000. Meanwhile, the labor force participation rate, the proportion of the population either looking for a job or already holding a job, edged up 0.1 percentage point to 62.6% in March, reflecting both an increase in the number of persons in the labor force (+480,000) and a decrease in the number of persons not in the labor force (-320,000). Moreover, the labor force participation rate for people who aged between 25 and 54 remained at 83.1%. While the overall labor force participation rate is still below its pre-pandemic levels at the beginning of 2020, the rate for people who aged between 25 and 54 is back to the pre-pandemic level. For industry sectors, employment in leisure and hospitality (+72,000), government (+47,000), professional and business services (+39,000), and health care (+34,000) continued to trend up in March. Employment in the overall construction sector decreased by 9,000 in March, following a 12,000 gain in February. While residential construction shed 7,000 jobs, non-residential construction employment lost 1,800 jobs in March. Residential construction employment now stands at 3.2 million in March, broken down as 934,000 builders and 2.3 million residential specialty trade contractors. The 6-month moving average of job gains for residential construction was 700 a month, reflecting three monthly job losses that occurred in November 2022, January, and March 2023. Over the last 12 months, home builders and remodelers added 46,300 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 1,263,100 positions. In March, the unemployment rate for construction workers decreased by 0.5 percentage points to 4.4% on a seasonally adjusted basis. The unemployment rate for construction workers has been trending lower, after reaching 14.2% in April 2020, due to the housing demand impact of the COVID-19 pandemic. Related ‹ States and Construction Trades Most Reliant on Immigrant Workers, 2021Tags: employment, labor force, labor force participation rate, residential construction employment, wage

Job Gains Slow in March2023-04-07T11:16:11-05:00

2022 State-Level GDP Data

2023-03-31T13:15:31-05:00

Real gross domestic product (GDP) increased in all 42 states and the District of Columbia in 2022 according to the U.S. Bureau of Economic Analysis (BEA). Six states recorded declines while Maryland and New Hampshire reported no change. The percent change in real GDP ranged from 4.9 percent increase in Idaho to 2.4 percent decline in Alaska. Nationwide, growth in real GDP, measured on a seasonally adjusted annual rate basis, increased 2.1 percent in 2022, after a strong 2021 (+5.9 percent). Professional, scientific, and technical services; information; and real estate and rental and leasing were the leading contributors to the increase in real GDP across the country. Regionally, real GDP growth increased in all the regions between 2021 and 2022. The percent change in real GDP ranged from 3.0 percent increase in the Rocky Mountain region (Colorado, Idaho, Montana, Utah, and Wyoming) to 0.8 percent increase in the Far West region (Alaska, California, Hawaii, Nevada, Oregon, and Washington) and the Plains region (Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota). Overall, 15 out of 21 industry groups contributing to the increase in real GDP. Arts, entertainment, and recreation; administrative and support and waste management; and information services were the leading contributors the increase in real GDP in 2022.  Construction sector was the biggest drag on the economy in 2022. At the state level, real estate and rental and leasing industry was the leading contributor to the real GDP increase in Idaho, the state with the largest increase. Following Idaho, Tennessee, Florida, Nevada, and Texas had the top five increases in real GDP in 2022.  Alaska, Louisiana, Iowa, North Dakota, Oklahoma, and Wyoming saw real GDP decline last year. Related ‹ Distribution of 1-4 Unit Residential Construction Loans Among Banks by Asset SizeTags: gdp, macroeconomics, state and local markets, state GDP

2022 State-Level GDP Data2023-03-31T13:15:31-05:00
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