There were several aspects of the new jobs report that real estate agents should be aware of.
The government released its latest jobs report earlier today, and as with past reports, there was a subtle mixture of highly positive and slightly discomforting news in regards to the economy.
So with an eye on how labor trends could impact housing, here are the five details from the report that we think you should know:
1. 200,000 Club – Non-farm payrolls grew by a seasonally adjusted rate of 295,000 jobs in February; with that increase, the economy has added more than 200,000 jobs for 12 straight months, the best streak in 20 years.
2. Unemployment Drops – Further good news came on the employment front, with the unemployment rate dropping from 5.7 percent in January to 5.5 percent last month; though greater hiring trends are certainly to thank for that lower rate, there’s an implicit, unsettling dimension as well, one we’ll address in our next point.
3. Participation Rate Also Drops – Unemployment may have fallen, but so did the labor-force participation rate, which declined from 62.9 to 62.8 percent in February; that’s the lowest level of participation since the late ’70s, and it suggests that more and more Americans are giving up on looking for work – and we should mention that “discouraged workers,” as they’re called, are not included in the official unemployment rate, which is reserved for people who are actively looking for work.
4. Youth Employment Improves – One positive development, though, has been the rising ranks of employment among young adults. From 2009 to 2012, the employment rate for Millennials had been roughly 4 percentage points below normal, but it has been steadily increasing now the last few months and, at 76.8 percent, is now at its highest level in six years. Millennials represent the next source of housing demand, so such trends are only positive for housing.
5. Wages Remain Low – Even with the employment situation improving, though, wages showed no signs of progressing last month. True, they were up 2 percent from a year ago, but that’s actually worse than January’s 2.2 percent increase, and represents a mere three-cent rise month-to-month. So basically, wages are still not rising anywhere near the rate of inflation, and until we see robust wage growth, it’s unlikely that all those additional jobs will translate into more home sales.