Instant Reaction: December Jobs Report

The following is NAR Chief Economist Lawrence Yun’s reaction to today’s December jobs report from the U.S. Bureau of Labor Statistics. 156,000 jobs were created last month and wages meaningfully increased 2.9 percent year-over-year.

“The top figure of net job creation in December shows a positive but decelerating trend. The job additions over the month were a positive 156,000. The 12-month tally comes to 2.16 million in 2016, compared to 2.7 million in 2015 and 3.0 million in 2014. The hourly wage rate perked up to 2.9% in December, the highest gain since early 2009. However, the take-home weekly pay rose by only 1.9% because the total hours worked declined. Even in real estate, where there is a need for increased home construction and more commercial spaces, the weekly hours worked fell to 38.7 hours. The typical hours worked had been 39 for most of 2016 and was 39.6 exactly one year ago. This declining hours imply weak future hiring since existing workers will first be allowed to get in extra hours before adding new hires.

Even with recent slowing month-to-month trends, it is likely construction worker demand will rise quite robustly later in 2017 from both the need to provide more housing units and from an economic stimulus measure that will no doubt include infrastructure spending. The construction wage growth was 3.0%, above most other industries and will likely accelerate higher.”