Compared to the fourth quarter of 2023, the U.S. economy grew at a noticeably slower pace in the first quarter of 2024 due to an increase in the trade deficit and weaker inventory investment. But it was still on solid ground supported by consumers, the government, and the housing industry. Meanwhile, the data from the GDP report suggests that inflation accelerated. The GDP price index rose 3.1% for the first quarter, up from a 1.6% increase in the fourth quarter of 2023. The Personal Consumption Expenditures (PCE) Price Index, which measures inflation (or deflation) across various consumer expenses and reflects changes in consumer behavior, rose 3.4% in the first quarter. This is up from a 1.8% increase in the fourth quarter of 2024, the biggest gain in a year. According to the “advance” estimate released by the Bureau of Economic Analysis (BEA), real gross domestic product (GDP) expanded at a modest 1.6% annual pace in the first quarter of 2024. This is slower than a 3.4% gain in the fourth quarter of 2023, and the lowest annual growth rate in the past seven quarters. This quarter’s growth was lower than NAHB’s forecast of a 2.0% increase. This quarter’s increase in real GDP reflected increases in consumer spending, residential fixed investment, nonresidential fixed investment, and state and local government spending. Consumer spending, the backbone of the U.S. economy, rose at an annual rate of 2.5% in the first quarter. It reflects an increase in services that were partly offset by a decrease in goods. While expenditures on services increased 4.0% at an annual rate, goods spending decreased 0.4% at an annual rate. The decrease in goods mainly reflects decreases in motor vehicles and parts (-9.0%) and gasoline and other energy goods (-10.9%). In the first quarter of 2024, residential fixed investment (RFI) made its largest contribution to GDP growth since the first quarter of 2021. It rose 13.9% in the first quarter, up from a 2.8% increase in the fourth quarter of 2023. This is the third straight gain after nine consecutive quarters of declines. Within residential fixed investment, single-family structures rose 18.1% at an annual rate, multifamily structures declined 7.4%, and improvements rose 0.9%. Additionally, nonresidential fixed investment increased 2.9% in the first quarter, following a 3.7% increase in the previous quarter. The increase in nonresidential fixed investment mainly reflected an increase in intellectual property products (+5.4%). The increase in state and local government spending primarily reflected an increase in compensation of state and local government employees. The U.S. trade deficit increased in the first quarter as imports increased more than exports. A wider trade deficit shaved 0.86 percentage points off GDP. Imports, which are a subtraction in the calculation of GDP, increased 7.2%, while exports rose 0.9%. Discover more from Eye On Housing Subscribe to get the latest posts to your email.

Nonfarm payroll employment increased in 42 states and the District of Columbia in January compared to the previous month, while eight states saw a decrease. According to the Bureau of Labor Statistics, nationwide total nonfarm payroll employment increased by 229,000 in January, following a gain of 290,000 jobs in December . On a month-over-month basis, employment data was most favorable in New York, which added 59,300 jobs, followed by California (+58,100), and then Florida (+38,800). A total of 17,100 jobs were lost across eight states, with Oregon reporting the steepest job losses at 4,900. In percentage terms, employment in Vermont increased the highest at 0.6%, while South Dakota saw the biggest decline at 0.4% between December and January. Year-over-year ending in January, 2.8 million jobs have been added to the labor market. Except for Oregon and Illinois, all other states and the District of Columbia added jobs compared to a year ago. The range of job gains spanned from 2,200 jobs in Vermont to 263,900 jobs in Texas. Conversely, Oregon and Illinois lost a total of 11,500 jobs on a year-over-year basis. In percentage terms, Nevada reported the highest increase at 3.8%, while Oregon showed the largest decrease at 0.2% compared to a year ago. Across the nation, construction sector jobs data[1]—which includes both residential and non-residential construction— showed that 32 states reported an increase in January compared to December, while 17 states lost construction sector jobs. The remaining two, Missouri and the District of Columbia reported no change on a month-over-month basis. North Carolina, with the highest increase, added 4,000 construction jobs, while Illinois, on the other end of the spectrum, lost 5,300 jobs. Overall, the construction industry added a net 19,000 jobs in January compared to the previous month. In percentage terms, Hawaii, Mississippi, and Arkansas reported the highest increase at 2.3% and Illinois reported the largest decline at 2.3%. Year-over-year, construction sector jobs in the U.S. increased by 218,000, which is a 2.8% increase compared to the January 2023 level. California added 44,600 jobs, which was the largest gain of any state, while New York lost 12,000 construction sector jobs. In percentage terms, South Dakota had the highest annual growth rate in the construction sector at 11.3%. Over this period, the District of Columbia reported the largest decline of 5.1%. [1] For this analysis, BLS combined employment totals for mining, logging, and construction are treated as construction employment for the District of Columbia, Delaware, and Hawaii.

In February, job gains continued despite elevated interest rates. The unemployment rate increased while the labor force participation rate held steady. February’s jobs report shows that the labor market remains resilient but shows signs of slowing. Additionally, wage growth slowed slightly in February. On a year-over-year basis (YOY), wages grew 4.3% in February, following a 4.4% increase in January. This is 0.5 percentage points lower than a year ago. Wage growth is positive if matched by productivity growth. If not, it can be a sign of lingering inflation. Total nonfarm payroll employment increased by 275,000 in February, greater than the downwardly revised increase of 229,000 jobs in January, as reported in the Employment Situation Summary. There were significant downward revisions to the initial reported job gains for December and January. The monthly change in total nonfarm payroll employment for December was revised down by 43,000, from +333,000 to +290,000, while the change for January was revised down by 124,000 from +353,000 to +229,000. Combined, the revisions were 167,000 lower than the original estimates. Despite restrictive monetary policy, about 6.9 million jobs have been created since March 2022, when the Fed enacted the first interest rate hike of this cycle. In February, the unemployment rate increased by 0.2 percentage points to 3.9%, after holding at 3.7% for three straight months. This marks the highest level since January 2022. The number of unemployed persons rose by 334,000 to 6.5 million, while the number of employed persons declined by 184,000. Meanwhile, the labor force participation rate, the proportion of the population either looking for a job or already holding a job, was unchanged at 62.5% for the third consecutive month. Moreover, the labor force participation rate for people aged between 25 and 54 rose 0.2 percentage points to 83.5%. While the overall labor force participation rate is still below its pre-pandemic levels at the beginning of 2020, the rate for people aged between 25 and 54 exceeds the pre-pandemic level of 83.1%. For industry sectors, employment in health care (+67,000), government (+52,000), food services and drinking places (+42,000), social assistance (+24,000), and transportation and warehousing (+20,000) increased. Employment in the overall construction sector increased by 23,000 in February, following an upwardly revised 19,000 gains in January. While residential construction lost 1,200 jobs, non-residential construction employment added 24,200 jobs for the month. Residential construction employment now stands at 3.3 million in February, broken down as 936,000 builders and 2.4 million residential specialty trade contractors. The 6-month moving average of job gains for residential construction was 4,433 a month. Over the last 12 months, home builders and remodelers added 56,800 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 1,348,500 positions. In February, the unemployment rate for construction workers was unchanged at 5.1% on a seasonally adjusted basis. The unemployment rate for construction workers remained at a relatively lower level, after reaching 14.2% in April 2020, due to the housing demand impact of the COVID-19 pandemic.