Jobs will be ever more critical to support home sales in a rising interest rate environment. Therefore, the latest addition of 192,000 jobs in March is a big plus. The total gain over the past 12 months is 2.2 million jobs.
From the worst of the recent recession a few years ago, nearly 8 million jobs have been added. Recall, however, during the recession that 8 million jobs were shed. Not yet a new employment peak, but getting very close to it.
In the construction sector 19,000 jobs were added in the month. Still, there are 2.5 million fewer construction workers now versus the peak in 2007. Also general contractor jobs now stand at 3.7 million compared to 5 million in 2006.
Employment in real estate, including sales and rental leasing, is on the rise.
Good news: each worker is working at bit longer, 34.5 hours per week on average compared to 34.3 hours in the prior month. That extra decimal point in hours worked multiplied by 138 million workers has a meaningful impact on the total work hours in America.
Bad news: the typical wage rate fell in March to $20.47 per hour from $20.49 for non-supervisory workers in the prior month. Wages are growing essentially at 2 percent a year, below the gains in apartment rents which are rising at 3 percent.
The unemployment rate did not change and remained at 6.7 percent. But due to ignoring who is in the labor force and who is not, a cleaner picture of job conditions can be measured by how much of the adult population has jobs. This “employment rate” unfortunately is barely improving.
Over the longer-term perspective, from 2000 to today, 34 million more people are living in America. But job additions have been only 6 million.
One reason for the mismatch between population and employment gains is due to the decline in the labor force participation rate. It inched a bit in the past month, but still remains well below the historical normal. Too many Americans, it seems, have given up.
The United States in declaring its independence from Britain spoke of the rights to life, liberty, and the pursuit of happiness. Note it did not say the right to happiness, but the pursuit of it. No one should automatically get happiness, because there is a great deal of satisfaction in overcoming trials and setbacks. In other words, the journey is often more important than the destination. That is why some people wake up smiling each day though not knowing what will happen that day.
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.