Economists' Outlook

Housing stats and analysis from NAR's research experts.

Instant Reaction: Jobs, January 6, 2023

There are more Americans working today than at any other time in history due to 223,000 net new jobs in the past month, 4.5 million in the past year, 11.2 million in the past two years, and 23.2 million since the low point during the economic lockdown in April 2020. The unemployment rate is at a historic low of 3.5%. Wage growth over the past 12 months was 4.6%.

Job additions will be critical in generating fresh housing demand as mortgage rates show signs of stabilization. Housing affordability remains a challenge for those renters considering buying a home. More homes, therefore, need to be built to ensure more supply and lessen the upward pressure on home prices and apartment rents. This will also help tame the overall consumer price inflation, permitting the Federal Reserve to stop raising interest rates and possibly lower its short-term fed funds rate before the year ends.

In December, the construction industry added 9,500 workers in the home-building sector, though tilted mostly toward apartment buildings. Unlike the federal and state governments, where employment levels are back up to pre-covid days, local governments appear to be having difficulty competing with other sectors in hiring people, including positions such as substitute teachers, school bus drivers, and police officers. There are 400,000 fewer local government employees now than pre-pandemic.

Bar graph: Payroll Jobs, January 2020 to December 2022
Bar graph: Payroll Jobs in Local Governments, January 2020 to December 2022
Unemployment Rate, January 2020 to December 2022
Line graph: Consumer Price Inflation Wage Growth, January 2020 to December 2022