Exceptional payroll growth in July and upward revisions to job gains in the preceding two months underline the persistent strength of the U.S. economy, which is now in its seventh year of expansion. Secondary indicators of labor market activity, including unemployment claims, the unemployment rate and wage growth, reinforce the strengthening trend and diminish some of the negative mixed signals in other economic data points. The combination of positive labor market trends will support additional… Read More
Contrary to polls and predictions, citizens of the United Kingdom voted to leave the European Union, creating uncertainty that induced a sharp decline in global equity markets.
The substantial jump in hiring during June to the highest monthly level this year suppresses talk of a sharp slowdown in job creation and strongly reaffirms that the U.S. economy remains on a growth track. Although last month’s survey occurred before the unexpected outcome of the Brexit vote, secondary employment indicators including initial unemployment claims and elevated job openings point to a stable labor market and prospects for further growth.
A modest advance in sales activity during the month of May put additional strain on for-sale inventory as the single-family housing market seems to remain caught in a loop that continues to prevent many prospective homebuyers from making a purchase. Sales of existing single-family homes are rising, but the low level of homes available for purchase leaves many would-be buyers unable to transact and is exerting upward pressure on prices.
Declining unemployment claims and job openings near an all-time high point to an expanding labor market, not one that is losing momentum as suggested by weaker-than-anticipated job creation in May.
The increase in sales of previously owned homes and new single-family residences in April illustrates growing demand for owner-occupied housing and the improving ability of prospective homebuyers to save for down payments and handle monthly mortgage obligations. Interest rates on residential mortgages remain near historic lows, maintaining housing affordability and stimulating a higher volume of single-family home purchases even as prices continue to rise and for-sale inventory remains limited.
Solid hiring across multiple employment sectors in April did not produce a large gain in U.S. payrolls, but the increase nonetheless reaffirms that the labor market remains in sound condition.
Housing demand remains elevated as low mortgage rates have helped keep the cost of ownership in check despite steady appreciation. The solid pace of hiring over the last six years and modest but consistent wage growth have helped prospective homeowners repair their balance sheets and re-engage the housing market.
A solid burst of hiring last month culminated a strong first quarter for the U.S. labor market.
Single-family home sales were curbed by a February chill, limited inventory, and a boost in the apartment sector.