Payroll job gains of 678,000 imply a move away from an easy monetary policy and a focus on containing inflation. The Federal Reserve will be raising interest rates this month and beyond. The employment gap between current conditions and pre-COVID days is narrowing, with only 2.5 million more jobs needed to get there. Employment in the oil sector is still down by 9,000 compared to pre-COVID days, so expect high oil prices for some time. Inflation is already high at 7.5%, and the latest wage gain (only 5.1% in February) is not catching up.

More housing inventory will show up later in the year because jobs in residential construction and for general contractors have been steadily rising. There are 314,000 more workers now compared to March 2020. It is a different story in commercial real estate, however, as there are 136,000 fewer workers in the sector and office buildings still remain mostly empty. It appears many Americans took early retirement, as the labor force participation rate is a full one percentage point below what it was before COVID. That also means some have become Realtors®. The industry is fiercely competitive.

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