- The June jobs report was perhaps the only one in recent memory where economists were just as, if not more, interested in the previous month’s revisions than the current month’s estimates. As it turns out, May was indeed a bad month, but June numbers ushered in relief that the U.S. labor market is doing well in a maturing economic cycle.”
- Although the rate of year-over-year job growth appears to be flattening, the short-run impact on housing is likely to be negligible. Not only is tight inventory keeping prices buoyed in many markets, growth in residential construction employment is out pacing total job growth by a factor of two
Job growth in June rebounding vigorously from a weak and downwardly revised May, adding 287,000 jobs, or 2.1%, year-over-year growth. This was the 68thconsecutive month of year-over-year gains, and provides a welcome sign that the U.S. economy is healthy despite concerns over the health of the global economy. The downside of this month’s report is that the dismal numbers in May turned out to be even worse than initially reported, having added just 11,000 jobs, which is revised from 38,000.
Despite the solid June job numbers, the year-over-year job growth rate continues to slow from a post-recession high of 2.5% in February of 2015. While strong, the January to June 2016 job gains of 2.1% to 2.3% are failing keep up with the year-over-over gains seen at this time last year of 2.4% to 2.5%. This slowing growth reflects a maturing economic cycle. However, the impacts of slowing job growth on the housing market may be negligible in the short-run, given historically tight inventory.
On the construction side, job growth from homebuilding activity remains solid. The residential construction sector added 133,200 jobs year-over-year, or 5.5%growth, in June. This continued uptick reflects both a solid year for housing starts as well as increasing confidence of homebuilders headed into the remainder of the year.
