By Lawrence Yun
More jobs were added in the past month, but more recently, the pace has markedly slowed down. The 187,000 net new payroll jobs created in July and 185,000 in June are the slowest two months of job additions since the start of the COVID lockdown over three years ago. Additionally, there have been steadily fewer job openings, standing at 9.6 million recently compared to 12 million two years ago. It is still the case nonetheless of more help wanted signs than the 5.8 million Americans who are searching for a position. The labor shortage therefore continues. The count of those who are not in the labor force rose a bit in the past month. This is the reason why the unemployment rate fell even with slowing job creation. More importantly, this is why the number of those not in the labor force remains stubbornly high, with around 5 million more not searching for work compared to pre-Covid levels. The wage rate rose by 4.4% to an average of $33.74 an hour. With consumer price inflation running at 3%, it marks an improvement in the standard of living for working Americans. It is a nice turn after two years of falling living standards when inflation was eating more of a paycheck.
The economy is chugging along but is certainly not robust. It could turn into a job-cutting recession if the Fed continues to raise interest rates. If the Fed decides to halt the rate increases, then the housing sector can grow and provide a cushion for the economy.
Lawrence Yun is Chief Economist and oversees the Research group at the NATIONAL ASSOCIATION OF REALTORS®. He supervises and is responsible for a wide range of research activity for the association including NAR’s Existing Home Sales statistics, Affordability Index, and Home Buyers and Sellers Profile Report. He regularly provides commentary on real estate market trends for its 1.4 million REALTORS®. Dr. Yun creates NAR’s forecasts and participates in many economic forecasting panels, among them the Blue Chip Council and the Wall Street Journal Forecasting Survey. He also participates in the Industrial Economists Discussion Group at the Joint Center for Housing Studies of Harvard University. He appears regularly on financial news outlets, is a frequent speaker at real estate conferences throughout the United States, and has testified before Congress. Dr. Yun has also appeared as a guest on CSPAN’s Washington Journal. Dr. Yun received his undergraduate degree from Purdue University and earned his Ph.D. from the University of Maryland at College Park.