Economists' Outlook

Housing stats and analysis from NAR's research experts.

Instant Reaction: Jobs, January 5, 2024

There is mixed news on the latest jobs figures. According to the household survey, there were 683,000 fewer Americans working in December.  Despite that, the unemployment rate held steady at 3.7% because 845,000 left the labor force and were not even searching for a job. This survey data is considered bouncy and less reliable than company payroll data, showing a jobs gain of 216,000. Moreover, the latest average hourly earnings rose by 4.1% to $34.27. This is an acceleration from the previous month of 4.0%, though down from 4.8% a year ago.

Wall Street emphasizes the more reliable payroll data and the wage inflation pressure. Consequently, the bond market believes the Federal Reserve will be more cautious about lowering interest rates this year. The benchmark 10-year Treasury yield has been pushed up a bit, which inevitably means that the recent declines in mortgage rates are over until more economic data points toward softer inflation. In addition to the job market, the U.S. government is looking to sell more bonds to finance its huge budget deficit. It may have to offer higher interest rates to entice more bond buyers. Some bond investors are also nervous about the possible government shutdown.

All in all, jobs are being added, raising long-term housing and commercial real estate demand. However, short-term dynamics are more influenced by the movements in mortgage rates and the bond market.

Bar graph: Total Payroll Jobs, January 2020 to December 2023
Bar graph: Monthly Payroll Job Gains, January 2021 through December 2023
Line graph: Out-of-Labor Force, January 2017 through January 2024
Line graph: Unemployment Rate, January 2017 through January 2024
Line graph: Wage Growth, January 2021 through December 2023
Bar graph: 10-Year Treasury Yield, January 2023 to January 2024
Bar and line graph: Downgrade of USA Debt and Continuing Resolution, 1990 to 2024F