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Latest Jobs Report

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 from the Bureau of Labor Statistics (BLS).

  • Data from the Bureau of Labor Statistics (BLS) showed that 113,000 jobs were added to the economy in January—a disappointing figure after December’s sub-100,000 jobs release. Job gains had averaged 200,000 per month in the 15 months prior to December. January’s report showed only minor upward revisions to previous figures.
  • In January, job growth occurred in the private sector (+142,000), while government lost jobs for the month (-29,000). The biggest job gains went to the construction (+48,000), professional and business services (+36,000), leisure and hospitality (+24,000), and manufacturing industries (+21,000).
  • On net, private industries have increased payrolls by 2 percent from one year ago, but some industries have exceeded this average. Construction employment is up 3.1 percent from a year ago, real estate jobs have increased by 2.7 percent, professional and tech services have increased by 2.7 percent, and leisure and hospitality jobs are up 3.1 percent. Perhaps the biggest gainer was temporary help services, up 9.0 percent in the year in spite of relatively small gains in January. By contrast, federal government employment fell 3 percent over the year while state and local government employment grew slightly, by 0.4 and 0.1 percent, respectively.
  • The household survey showed more positive figures. The unemployment rate was 6.6 percent, which the BLS classifies as essentially unchanged from last month’s 6.7 percent. This figure is notably lower from November when unemployment was 7.0 percent and also much improved from a year ago when unemployment was 7.9 percent.
  • What does this mean for markets? The unemployment rate is now also closer to the 6.5 percent threshold that the Fed has set for considering rate increases in addition to the taper of asset purchases which the Fed began in December. The Fed will have to consider weaker than expected payroll data against an improving unemployment rate. Inflation expectations seem to be well anchored and inflation is, for now, under the 2 percent target. While the Fed set a 6.5 percent unemployment rate threshold for rate increases, it’s widely expected that they will taper the bulk of asset purchases before increasing rates, suggesting that the first rate increase is still about 6 months off. Mortgage rates could move suddenly higher in anticipation of rate increases, much as they did last summer when refinance and transaction activity was high, but if purchase transaction volume steadies as it has in recent months and refinance volume evaporates, mortgages rates may adjust in a more gradual fashion.
  • Just last week, Janet Yellen became the first ever female Chair of the Board of Governors of the Federal Reserve System. While feminists share in the joy of her accomplishment, from a policy perspective the change may not be noticeable. Because she has been a member of the FOMC since she joined the Board of Governors in October 2010, Janet Yellen is expected to maintain much of the policy that she helped to shape as Vice Chair of the board.

Danielle Hale, Director of Housing Statistics

As a Research Economist at NAR, Danielle studies tax issues, the wealth impact of home ownership, and different measures of home prices.

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