Economists' Outlook

Housing stats and analysis from NAR's research experts.

Instant Reaction: Jobs, August 4, 2023

More jobs were added in the past month, but more recently, the pace has markedly slowed down. The 187,000 net new payroll jobs created in July and 185,000 in June are the slowest two months of job additions since the start of the COVID lockdown over three years ago. Additionally, there have been steadily fewer job openings, standing at 9.6 million recently compared to 12 million two years ago. It is still the case nonetheless of more help wanted signs than the 5.8 million Americans who are searching for a position. The labor shortage therefore continues. The count of those who are not in the labor force rose a bit in the past month.  This is the reason why the unemployment rate fell even with slowing job creation.  More importantly, this is why the number of those not in the labor force remains stubbornly high, with around 5 million more not searching for work compared to pre-Covid levels. The wage rate rose by 4.4% to an average of $33.74 an hour. With consumer price inflation running at 3%, it marks an improvement in the standard of living for working Americans. It is a nice turn after two years of falling living standards when inflation was eating more of a paycheck.

The economy is chugging along but is certainly not robust. It could turn into a job-cutting recession if the Fed continues to raise interest rates. If the Fed decides to halt the rate increases, then the housing sector can grow and provide a cushion for the economy.

Bar graph: Total Payroll Jobs, January 2020 to July 2023
Bar graph: Monthly Payroll Additions, January 2021 to July 2023
Line graph: Job Openings, January 2019 to July 2023
Line graph: Labor Shortage: Job Openings > Those Searching for Job, January 2019 to July 2023
Line graph: Out of Labor Force and Not Searching for Job, January 2019 to July 2023
Line graph: Wage Growth, January 2021 to July 2023