"Job gains continued, albeit a bit lightly, in the latest month. The 266,000 additions in April bring us to 1.8 million net new jobs in 2021. Let’s recall that 20 million jobs were lost in April of last year during the total pandemic lockdown and the job gains from re-opening the economy last year and this year so far still imply that 8 million more jobs are needed to get us back to the pre-pandemic levels.
Overall economic activity as measured by the GDP is down only 1% from peak, while jobs are down by 5%. This implies there is friction in the labor market with some industries going about producing more with fewer workers. For example, logging industry employment is still down 9% while lumber prices are soaring. There were no net job additions in construction despite the housing shortage in the latest month, though some general contractors moved out of commercial and into residential real estate. The construction industry is doing its best by offering higher pay, as weekly earnings in construction were up 7.1% versus only 2.7% overall.
The housing market is hot but could come to a halt if home prices continue to rise strongly and hurt affordability for first-time buyers. That is why it is critical for homebuilding to further ramp up. Let’s ensure that workers are not hindered from getting work at lumber mills and at construction sites."