The following is NAR Managing Director of Housing Research’s Danielle Hale’s reaction to this morning’s U.S. Bureau of Labor Statistics jobs report for June:
June job gains bounced back to 222,000 net jobs added and revisions pushed previous readings for April and May higher by 47,000 jobs, which signals that the apparent weakness in past months was just a blip due in part to late data reporting. While the unemployment rate notched up slightly, to 4.4 percent, the size of the labor force ticked up and other measures of labor market health are good.
Hours were up for workers, especially in manufacturing, and hourly earnings increased 2.5 percent from June 2016. The combination of hourly earnings increases and more hours worked meant that weekly earnings rose 2.8 percent from last year. Continued labor market health and additional spending power for workers is good news for the housing market, but even with the higher weekly earnings growth seen in June, home prices continue to outpace income growth.
More construction is needed to help slow home price increases. While the monthly reading for residential construction jobs was down for the 4th consecutive month, these jobs are up 4.3 percent from a year ago—much more than 1.6 percent for all other jobs. This suggests that we will continue to make slow progress on construction and increasing the inventory of homes available for sale.