Inman News
But an overall weakening labor market could include a silver lining for real estate as it puts downward pressure on mortgage rates
A closely watched measure of the labor market plummeted to its lowest point since the wake of the Great Recession, according to new data released this week, as a deteriorating labor market looked poised to keep downward pressure on interest rates.
The construction quit rate, a measure of how many construction workers left their jobs in a given month, fell to the lowest rate last month since August 2009, just two months after the end of the Great Recession.
That’s according to data released by the U.S. Bureau of Labor Statistics on Wednesday. The data show the construction quit rate specifically fell to 0.9 percent, according to the American Builders and Contractors.
“Indeed, other portions of this data release suggest an alarming deterioration in industrywide labor demand,” said Anirban Basu, chief economist of the American Builders and Contractors. “Fewer construction workers quit their jobs in July than in any month over the past nine years, suggesting widespread concern about job security, while layoffs jumped to the highest level since Q1 of 2023.”
Basu cautioned that the data can be volatile from month to month, and economists will keep a close watch on subsequent readings when the data are released.
The construction quit rate notwithstanding, the number of open construction jobs actually rose in July from a month earlier. There were 306,000 construction jobs open, up from 242,000 in June.
The data was part of the monthly Job Openings and Labor Turnover Summary (JOLTS) report from the BLS, and it included other leading indicators for the real estate industry. The report showed, for instance, that there are now more unemployed people than job openings for the first time since the pandemic.
That may represent something of a silver lining for real estate as a weakening labor market could keep downward pressure on mortgage rates.
Mortgage rates have been dropping since mid-August, when Federal Reserve Chair Jerome Powell said that policymakers at the central bank viewed unemployment as a bigger risk to the economy than inflation.
Rates fell to the lowest level of the year during the week ending Sept. 3 according to data released by Freddie Mac on Thursday.