Job Growth Remains Moderate in November

2023-12-08T10:19:58-06:00

In November, total nonfarm payroll employment increased by 199,000 and the unemployment rate declined to 3.7%, from 3.9% in October. The labor market continues to moderate. The Fed held interest rates steady for the second meeting in a row at the conclusion of its November meeting. This month’s employment data will be one of the key components in determining whether to hold the federal funds rate again at its December meeting. Given the cooling data, the bond market has seen a decline in interest rates, with the 10-year Treasury rate falling below 4.2% as of early this week. Additionally, wage growth continued to slow. In November, wages grew at a 4.0% year-over-year (YOY) growth rate, down 1 percentage point from a year ago. It marks the lowest YOY wage gain since June 2021, suggesting inflationary pressures are easing. Total nonfarm payroll employment increased by 199,000 in November, following a gain of 150,000 in October, as reported in the Employment Situation Summary. The monthly change in total nonfarm payroll employment for September was revised down by 35,000 from +297,000 to +262,000, while the October estimate remained at +150,000. Combined, the revisions took the original estimates down by 35,000. Despite restrictive monetary policy, more than 6 million jobs have been created since March 2022, when the Fed enacted the first interest rate hike of this cycle. In the first eleven months of 2023, nearly 2.6 million jobs were created, and monthly employment growth averaged 232,000 per month, less than the average monthly growth of 399,000 in 2022. The unemployment rate declined to 3.7% in November as the labor force participation rate edged up. The number of unemployed persons decreased by 215,000, while the number of employed persons increased by 747,000. 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 62.8% in November, reflecting the increase in the number of persons in the labor force (+736,000) and the decrease in the number of persons not in the labor force (-525,000). Moreover, the labor force participation rate for people who aged between 25 and 54 remained unchanged at 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 health care (+77,000), government (+49,000), and leisure and hospitality (+40,000) increased. Employment in manufacturing increased by 28,000, reflecting an increase of 30,000 in motor vehicles and parts as workers returned from the auto strikes. Employment in retail trade declined. Employment in the overall construction sector increased by 2,000 in November, following a 25,000 gain in October. While residential construction added 1,000 jobs, non-residential construction employment added 1,400 jobs for the month. Residential construction employment now stands at 3.3 million in November, broken down as 934,000 builders and 2.4 million residential specialty trade contractors. The 6-month moving average of job gains for residential construction was 6,717 a month. Over the last 12 months, home builders and remodelers added 53,000 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 1,321,500 positions. In November, the unemployment rate for construction workers rose 0.6 percentage points to 5.7% on a seasonally adjusted basis. It marks the highest rate since July 2021 and has been trending up in the past five months, after reaching the lowest rate of 3.6% in June 2023. ‹ Share of Homes Built in Community Associations Edges Down AgainTags: employment, labor force, labor force participation rate, residential construction employment, wage

Job Growth Remains Moderate in November2023-12-08T10:19:58-06:00

Job Openings Fall – But Not For Construction

2023-12-05T11:15:31-06:00

The bond market appears to be responding to cooling macroeconomic data, including labor market reporting, as long-term rates fall back. Among the risk factors that previously led to higher interest rates (more debt issuance, higher-for-longer monetary policy expectations, long-term fiscal deficit conditions, and strong current GDP growth data for the third quarter) was an ongoing, elevated count of open jobs for the overall economy. However, the number of open jobs is falling. In October, the number of open jobs for the economy declined to 8.7 million. This is notably lower than the 10.5 million reported a year ago. NAHB estimates indicate that this number must fall back below 8 million for the Federal Reserve to feel more comfortable about labor market conditions and their potential impacts on inflation. While the Fed intends for higher interest rates to have an impact on the demand-side of the economy, the ultimate solution for the labor shortage will not be found by slowing worker demand, but by recruiting, training and retaining skilled workers. This is where the risk of a monetary policy mistake can be found. Good news for the labor market does not automatically imply bad news for inflation. The construction labor market remained tight in October. The count of open construction jobs was steady at 423,000 in October after a revised reading of 427,000 in September. The count was 398,000 a year ago, during a period of housing market cooling. These estimates come after a data series high of 488,000 in December 2022. Despite recent tightness, the overall trend is one of cooling for open construction sector jobs as the housing market remains off peak levels and backlog is reduced, with a notable uptick in month-to-month volatility since late last year. The construction job openings rate was steady at 5% in October. The recent trend of these estimates points to the construction labor market having peaked in 2022 and is now entering a stop-start cooling stage as the housing market adjusts to higher interest rates. But the relatively elevated rate of construction job openings reflects the ongoing skilled labor shortage. The housing market remains underbuilt and requires additional labor, lots and lumber and building materials to add inventory. Hiring in the construction sector increased to a 4.7% rate in October after 3.9% in September. The post-virus peak rate of hiring occurred in May 2020 (10.4%) as a post-covid rebound took hold in home building and remodeling. Construction sector layoffs were steady at a 2% rate in October after 2% in September. In April 2020, the layoff rate was 10.8%. Since that time, the sector layoff rate has been below 3%, with the exception of February 2021 due to weather effects and March 2023 due to some market churn. Looking forward, attracting skilled labor will remain a key objective for construction firms in the coming years. While a slowing housing market will take some pressure off tight labor markets, the long-term labor challenge will persist beyond the ongoing macro slowdown. ‹ Amidst Housing Slowdown, Exurban Areas Post Largest Construction GainsTags: economics, employment, home building, housing, JOLTS

Job Openings Fall – But Not For Construction2023-12-05T11:15:31-06:00

Strong Job Gains in September

2023-10-06T11:29:05-05:00

Job growth remained solid in September as the Fed fights against inflation. In fact, the recent jobs data has been stronger than most economists expected and is a reminder that GDP growth for the third quarter will be very strong and inflation risks persist. Total nonfarm payroll employment increased by 336,000 and the unemployment rate remained at 3.8% in September. However, wage growth slowed. In September, wages grew at a 4.2% year-over-year growth rate, down 1.8 percentage points from the highest gain of 5.7% in February 2022. Slowing wage growth was the one positive data point for those hoping for slowing inflation in today’s labor market report. Total nonfarm payroll employment increased by 336,000 in September, following a gain of 227,000 in August, as reported in the Employment Situation Summary. The estimates for the previous two months were revised higher. The estimate for July was revised higher by 79,000 from +157,000 to +236,000, while the August increase was revised up by 40,000, from +187,000 to +227,000. Despite restrictive monetary policy, nearly 5.9 million jobs have been created since March 2022, when the Fed enacted the first interest rate hike of this cycle. In the first nine months of 2023, nearly 2.3 million jobs were created, and monthly employment growth averaged 260,000 per month, following the average monthly growth of 399,000 in 2022. The unemployment rate remained at 3.8% in September. The number of unemployed persons was essentially unchanged at 6.4 million, while the number of employed persons increased by 86,000. Meanwhile, the labor force participation rate, the proportion of the population either looking for a job or already holding a job, remained unchanged at 62.8%. Moreover, the labor force participation rate for people who aged between 25 and 54 was unchanged at 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 who aged between 25 and 54 exceeds the pre-pandemic level of 83.1%. For industry sectors, employment in leisure and hospitality (+96,000), government (+73,000), health care (+41,000), professional, scientific, and technical services (+29,000), and social assistance (+25,000) increased. Employment in the overall construction sector increased by 11,000 in September, following a 36,000 gain in August. While residential construction added 12,600 jobs, non-residential construction employment lost 1,300 jobs for the month. Residential construction employment now stands at 3.3 million in September, broken down as 933,000 builders and 2.4 million residential specialty trade contractors. The 6-month moving average of job gains for residential construction was 8,367 a month. Over the last 12 months, home builders and remodelers added 55,300 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 1,314,200 positions. In September, the unemployment rate for construction workers rose by 0.2 percentage points to 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. Related ‹ Property Taxes by State – 2022Tags: employment, labor force, labor force participation rate, residential construction employment, wage

Strong Job Gains in September2023-10-06T11:29:05-05:00

Growing Job Openings Leading to Higher Interest Rates

2023-10-03T10:19:45-05:00

Financial conditions continue to tighten, as the 10-year Treasury rate increased to above 4.75%. Among the factors leading to higher rates (more debt issuance, higher-for-longer monetary policy expectations, long-term fiscal deficit conditions, and strong current GDP growth forecasts) was a surprise jump in August for the total number of open, unfilled jobs. In August, the number of open jobs for the economy as a whole increased to 9.6 million, a significant increase over the 8.9 million estimated total for July. NAHB estimates indicate that this number must fall back below 8 million for the Federal Reserve to feel more comfortable about labor market conditions and their corresponding impact on inflation. While the Fed intends for higher interest rates to have an impact on the demand-side of the economy, the ultimate solution for the labor shortage will not be found by slowing worker demand, but by recruiting, training and retaining skilled workers. This is where the risk of a monetary policy mistake can be found. Good news for the labor market does not automatically imply bad news for inflation. The construction labor market continued to cool in August. The count of open construction jobs decreased to 350,000. This estimate comes after a data series high of 488,000 in December 2022. The overall trend is one of cooling for open construction sector jobs as the housing market slows and backlog is reduced, with a notable uptick in month-to-month volatility since late last year. The construction job openings rate held at 4.2% in August. The recent trend of these estimates points to the construction labor market having peaked in 2022 and is now entering a stop-start cooling stage as the housing market adjusts to higher interest rates. Despite additional weakening that will occur in the second half of 2023, the housing market remains underbuilt and requires additional labor, lots and lumber and building materials to add inventory. Hiring in the construction sector fell back to 4.4% in August after 4.8% in July. The post-virus peak rate of hiring occurred in May 2020 (10.4%) as a post-covid rebound took hold in home building and remodeling. Construction sector layoffs fell back to 2% in August after 2.2% in July. In April 2020, the layoff rate was 10.8%. Since that time, the sector layoff rate has been below 3%, with the exception of February 2021 due to weather effects and March 2023 due to some market churn. Looking forward, attracting skilled labor will remain a key objective for construction firms in the coming years. While a slowing housing market will take some pressure off tight labor markets, the long-term labor challenge will persist beyond the ongoing macro slowdown. Related ‹ August Gains for Private Residential Construction SpendingTags: economics, employment, JOLTS, labor market

Growing Job Openings Leading to Higher Interest Rates2023-10-03T10:19:45-05:00

Revolving Credit Growth Reaccelerates in July

2023-09-12T15:16:12-05:00

By David Logan on September 12, 2023 • Consumer credit outstanding growth slowed to 2.5% in July, down from 3.4% in July (SAAR) according to the Federal Reserve’s latest G.19 Consumer Credit report. Revolving credit growth reaccelerated to 9.2% in July, potentially reflecting strong consumer sentiment and job security in a tight—albeit cooling—labor market. In contrast, nonrevolving consumer debt outstanding inched up just 0.2% over the month. Total revolving consumer credit has surged 10.8% over the past 12 months, more than offsetting slow growth in nonrevolving credit outstanding. Total consumer credit outstanding stands at $5.0 trillion (break-adjusted[1] and seasonally adjusted), with $1.3 trillion in revolving debt and $3.7 trillion in non-revolving debt. Seasonally adjusted revolving and nonrevolving debt accounted for 25.5% and 74.5% of total consumer debt, respectively. Revolving consumer credit outstanding as a share of the total increased 0.2 percentage point over the quarter and is 0.5 percentage point higher than it was one year ago.  [1] The results of the 2020 Census and Survey of Finance Companies–delayed by the pandemic–were incorporated in the latest Consumer Credit (G.19) statistical release, resulting in large revisions dating back to June 2021. Rather than retain the large spike in credit that now appears in the raw data, we have used the “break-adjusted” historical time series developed by Moody’s Analytics and will continue to do so moving forward. Click here for more information. Related ‹ Household Real Estate Value Jumps in the Second QuarterTags: consumer credit, credit card debt, employment, Federal Reserve, g.19, nonrevolving debt, revolving debt

Revolving Credit Growth Reaccelerates in July2023-09-12T15:16:12-05:00

Unemployment Rises To 3.8% in August

2023-09-01T10:19:26-05:00

The recent employment data indicates that the labor market is cooling gradually due to rising interest rates. Total employment increased by 187,000 and the unemployment rate rose to 3.8% from 3.5%. Wage growth slowed. In August, wages grew at a 4.3% year-over-year growth rate, down 1.1 percentage points from a 5.4% gain in August 2022. The Bureau of Labor Statistics (BLS) announced the preliminary estimate of the annual benchmark revision, indicating March 2023 total nonfarm employment was revised down by 306,000 jobs, a 0.2% decrease from the previous release. Construction was revised up by 30,000 jobs, and manufacturing revised down by 43,000 jobs. The final revision will be issued in February 2024 with the publication of the January 2024 Employment Situation news release. Total nonfarm payroll employment increased by 187,000 in August, following a gain of 157,000 in July, as reported in the Employment Situation Summary. The estimates for the previous two months were revised down. The estimate for June was revised lower by 80,000 from +185,000 to +105,000, while the July increase was revised down by 30,000, from +187,000 to +157,000. Despite restrictive monetary policy, nearly 5.4 million jobs have been created since March 2022, when the Fed enacted the first interest rate hike of this cycle. In the first eight months of 2023, nearly 1.9 million jobs were created, and monthly employment growth averaged 236,000 per month, following the average monthly growth of 399,000 in 2022. The unemployment rate rose by 0.3 percentage points to 3.8% in August. The number of unemployed persons increased by 514,000 to nearly 6.4 million, while the number of employed persons increased by 222,000. Meanwhile, the labor force participation rate, the proportion of the population either looking for a job or already holding a job, rose 0.2 percentage points to 62.8%. Moreover, the labor force participation rate for people who aged between 25 and 54 edged up 0.1 percentage point 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 who aged between 25 and 54 exceeds the pre-pandemic level of 83.1%. For industry sectors, employment in health care (+71,000), leisure and hospitality (+40,000), social assistance (+26,000), and construction (+22,000) continued to trend up in August, while transportation and warehousing lost 34,000 jobs. Employment in the overall construction sector increased by 22,000 in August, following a 16,000 gain in July. While residential construction added 1,400 jobs, non-residential construction employment gained 21,000 jobs. Residential construction employment now stands at 3.3 million in August, broken down as 925,000 builders and 2.4 million residential specialty trade contractors. The 6-month moving average of job gains for residential construction was 3,500 a month. Over the last 12 months, home builders and remodelers added 42,400 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 1,293,500 positions. In August, the unemployment rate for construction workers rose by 0.4 percentage points to 4.9% 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. Related ‹ 2022 Single-Family Starts by Census DivisionTags: employment, labor force, labor force participation rate, residential construction employment, wage

Unemployment Rises To 3.8% in August2023-09-01T10:19:26-05:00

Job Openings Data Reveal Labor Market Cooling

2023-08-29T10:17:03-05:00

The count of open, unfilled jobs for the overall economy continued to moved lower in July, falling to 8.8 million. While certain inflation readings have raised the likelihood of a September Federal Reserve interest rate increase, the JOLTS survey is another data point indicating an ongoing but gradual cooling of macro conditions due to elevated interest rates. The count of open jobs was 11 million a year ago in July 2022. The count of total job openings will continue to fall in 2023 as the labor market softens and the unemployment rises. From a monetary policy perspective, ideally the count of open, unfilled positions slows to the 8 million range in the coming months as the Fed’s actions cool inflation. The economy is approaching that level according to this new data release. While higher interest rates are having an impact on the demand-side of the economy, the ultimate solution for the labor shortage will not be found by slowing worker demand, but by recruiting, training and retaining skilled workers. This is where the risk of a monetary policy mistake can be found.  Good news for the labor market does not automatically imply bad news for inflation. The construction labor market continued to cool in July. The count of open construction jobs decreased to 363,000. This estimate comes after a data series high of 488,000 in December 2022. The overall trend is one of cooling for open construction sector jobs as the housing market slows and backlog is reduced, with a notable uptick in month-to-month volatility since late last year. The construction job openings rate ticked down to 4.4% in July. The recent trend of these estimates points to the construction labor market having peaked in 2022 and is now entering a stop-start cooling stage as the housing market adjusts to higher interest rates. Despite additional weakening that will occur in the second half of 2023, the housing market remains underbuilt and requires additional labor, lots and lumber and building materials to add inventory. Hiring in the construction sector ticked up to 4.8% in July after a 4.7% reading in June. The post-virus peak rate of hiring occurred in May 2020 (10.4%) as a post-covid rebound took hold in home building and remodeling. Construction sector layoffs increased to 1.8% in July. In April 2020, the layoff rate was 10.8%. Since that time, the sector layoff rate has been below 3%, with the exception of February 2021 due to weather effects and March 2023 due to some market churn. Looking forward, attracting skilled labor will remain a key objective for construction firms in the coming years. While a slowing housing market will take some pressure off tight labor markets, the long-term labor challenge will persist beyond the ongoing macro slowdown. Related ‹ Wood-Framed Home Share Increased for Three Straight YearsTags: employment, home building, JOLTS

Job Openings Data Reveal Labor Market Cooling2023-08-29T10:17:03-05:00

About My Work

Phasellus non ante ac dui sagittis volutpat. Curabitur a quam nisl. Nam est elit, congue et quam id, laoreet consequat erat. Aenean porta placerat efficitur. Vestibulum et dictum massa, ac finibus turpis.

Recent Works

Recent Posts