In each Economic Update, the Research staff analyzes recently released economic indicators and addresses what these indicators mean for REALTORS® and their clients. Today’s update discusses the latest jobs data.
- Jobs are being added to the economy. The 169,000 net new jobs in August brings the 12-month total to 2.2 million net total additions to the economy. From the low point 5 years ago when 8 million jobs were shed, to-date nearly 7 million new ones have been recovered. By spring of next year, the economy is likely to retouch the prior peak in total jobs. Unfortunately, however, over the 5 year period it took to recover the jobs there has been a constant stream of high school and college graduates looking for work.
- Jobs in residential construction fell by 600 in August (probably a fluke in one month data and inconsistent with rising housing starts) but general contractors jobs rose by 4,900.
- Jobs in the federal government continued to slide down due to sequestration. There are now 71,000 fewer people on the federal employment payroll since a year ago.
- The average hourly earnings rose by 2.2 percent in 12 months, one of the fastest raises since the recession. This is good news for those with work and is not yet a concern in relation to adding to inflationary pressure.
- The unemployment rate declined a notch to 7.3 percent. We should not celebrate because it was driven by a greater number of people moving out of the labor force. A person without a job that does not actively seek one is not counted in the statistics. The latest labor force participation rate of 63.2 percent is at a 35-year low. The labor participation by men is the lowest since the data was collected, and may even be the lowest rate ever since the founding of the country. One simple technique for successful living in the past was working. What has happened?
- By contrast, for women, the participation rate remains near historic highs even with some declines in recent years. Even at today’s G20 meeting among the industrialized countries, Angela Merkel – currently the world’s most powerful woman - appears to be the only person smiling, due to the well-performing German economy.