Employment in March

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 employment rate.

  • Job growth weakened in March with only 88,000 net new jobs.  The monthly job gains in the prior six months averaged 197,000.  From the low point in 2010, nearly 6 million jobs (5.9 million to be exact) have been added to the economy.
  • However, we should be mindful that 8 million jobs had been lost during the downturn so only 74 percent of those jobs losses have been recovered to date.  All the while a steady stream of fresh college and high school graduates are looking for work.
  • The unemployment rate fell to 7.6 percent in March, which marks continuing progress from 10 percent unemployment rate few years ago.  However, most of the decline is due to people not searching for work – such as college students who are unable to find a good job going to grad school, and an increasing number of people seeking disability benefits.  As opposed to the unemployment rate, the employment rate – how many of the adult population have jobs – has been stuck at a cyclical low point with no improvement.  Only 58.5 percent of adults have jobs compared to 63 percent just five years ago.  In other words, had people not moved out of the labor force, today’s unemployment rate would be about 12 percent.
  • Construction jobs are slowly expanding.  A total of 18,000 net new ones were added in March.  Still, another 2 million jobs requiring hard-hats are necessary before getting us back to normal in this sector.
  • Employment in Professional Business Service sector has been making solid gains and has already surpassed the prior peak.  These jobs such as in accounting, legal, and consultancy require office spaces.  Therefore, continuing growth will mean higher leasing demand for office spaces.
  • The average hourly earnings fell by a penny in March to $20.03, though it is up by 1.8 percent from a year ago.  Since the overall inflation rate is about that level, wage growth for those with a job is barely keeping up with the increased cost of living conditions.  It goes without saying, for those without a job that standard of living conditions are falling even with unemployment insurance.
  • From housing and commercial real estate business opportunity perspective, it is not the unemployment or employment rate that matters.  It is about jobs and near 6 million net new jobs will provide support for a further rise in home sales and further increase in leasing demand of commercial building spaces.

Lawrence Yun, PhD., Chief Economist and Senior Vice President

Lawrence Yun is Chief Economist and Senior Vice President of Research at NAR. He directs research activity for the association and regularly provides commentary on real estate market trends for its 1 million REALTOR® members.

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