In late August, Gary Keller told the 11,300 Keller Williams agents, brokers and team leaders gathered in Austin, Texas for Keller Williams Mega Camp that this is the most confusing market he has ever seen.
“It’s confusing, and it’s only confusing because you have mixed signals,” Keller told attendees.
Among those mixed signals were the rising interest rates and continued job growth.
The job growth trend continued into September as total nonfarm payroll employment rose by 263,000 jobs from the month prior according to data released Friday by the Bureau of Labor Statistics.
So far this year, monthly job growth has averaged 420,000, down from 562,000 per month in 2021.
With September’s job gains, unemployment dropped back down to 3.5% from 3.7% in August, with a total of 5.8 million unemployed persons.
“While the pace of growth slowed in September to 263,000, this is still faster than can be sustained in the US economy over time,” Mike Fratantoni, the chief economist and SVP of the Mortgage Bankers Association, said in a statement. “And other data clearly signaling a slowing economy lead us to forecast a sharp drop in job growth over the coming months.”
The construction industry added 19,000 jobs in September, the majority (17,700) of which were specialty trade contractors, with 6,500 being residential specialty trade contractors. Meanwhile, residential building lost 100 jobs from the month prior.
“Construction and general contractor jobs also expanded, though these lean more toward the commercial building of warehouses and apartments and less building of single-family homes,” Lawrence Yun, the National Association of Realtors’ chief economist, said in a statement.
Odeta Kushi, First American’s deputy chief economist, added: “While the construction industry has faced a labor shortage for many years, the slowdown in the housing market and homebuilding, particularly for single-family homes, will likely put downward pressure on job gains in months to come.”
The real estate, and rental and leasing services sector gained 5,000 jobs in September, with real estate gaining 7,200 jobs, while rental and leasing services lost 2,300 jobs.
In February 2020, a combined 300,000 were employed in “real estate credit” and as mortgage and nonmortgage loan brokers. As of August, there were about 400,000 people in those jobs, suggesting the industry still has a massive amount of cuts to make in the coming months.
The lion’s share of the job growth in August came from gains in the leisure and hospitality sector (up 83,000 jobs), and the health care sector (up 60,000 jobs), which is now back to its February 2020 level of employment.
“Overall, the September jobs report reflects a still-strong labor market that is gradually cooling,” Kushi said. “The Federal Reserve really wants to see the labor supply increase, and the September jobs report did not deliver.”
The report also noted that Hurricane Ian, which made landfall at the tail end of the month, had no discernible effect on employment and unemployment data for September.
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