The labor market is strengthening, with 172,000 net new jobs in May. Moreover, the upward revisions to the prior months’ data show cumulative job gains of 565,000 over a three-month period—among the strongest in recent years. The healthcare sector has been consistently adding jobs at a solid pace. On the other hand, both federal and state government jobs have been falling. In addition, attesting to recent years’ softness in home sales, employment in home furnishing stores and garden supply shops has also been falling. Likewise, housing-related construction jobs have been declining, even as construction jobs in other sectors—such as data centers and non-residential real estate—have been rising.
The latest wage growth of 3.4% would be considered good in normal times, but due to rising gasoline and other consumer prices, the standard of living is falling modestly. Consumer price inflation was 3.8%. However, wage gains in the construction and leisure and hospitality sectors are rising at 4.4% and 4.0%, respectively, suggesting a worker shortage. In fact, the unemployment rate of 4.3% is tight.
Overall, there is a record-high number of job-holders in America, which should, in theory, mean a record-high number of home sales. But the historic low in consumer sentiment could largely be due to housing affordability challenges and declining homeownership, especially among younger adult households.
