The U.S. economy added 115,000 jobs in April, according to data released Friday by the U.S. Bureau of Labor Statistics.
While this makes it appear that the job market remains strong, employment numbers for the two prior months were revised downward, pushing the three-month average for job gains to 48,000 per month.
Month over month, unemployment held steady at 4.3%, as the number of unemployed people was mostly unchanged at 7.4 million. Both measures have had little movement over the prior 12-month period.
The majority of April’s job gains occurred in health care (+37,000 jobs), transportation and warehousing (+30,000 jobs), and retail trade (+22,000 jobs). On the opposite end of the spectrum was federal government employment, which continued to decline with a loss of 9,000 jobs, as well as information employment (-13,000).
The construction sector added 9,000 jobs last month. More specifically, however, the residential building construction sector lost 1,500 jobs and residential specialty trade contractors shed 8,900 positions. The majority of the construction sector jobs gains occurred in nonresidential building construction (+5,600 jobs) and nonresidential specialty trade contractors (+12,600 jobs).
Real estate also lost jobs in April, with employment falling by 1,700 jobs, while rental and leasing services employment fell by 3,600 jobs.
Despite the top-line number for job gains, Mike Fratantoni, senior vice president and chief economist for the Mortgage Bankers Association (MBA), sees other indicators casting a shadow.
“The labor force participation rate has declined from 62.6 to 61.8 percent. The labor force, the total number of people either employed or actively looking for work and counted as unemployed, has declined by more than 1 million,” he said in a statement.
“And the number of people employed has declined by more than 1.2 million. The U-6 measure, now at 8.2 percent, captures some of this shift in individuals leaving the labor force.”
But First American senior economist Sam Williamson views things a bit differently.
“Overall, the report shows few signs of labor-market deterioration and suggests that, after several months of noisy data, the job market may be finding a firmer floor,” Williamson said in a statement.
Even with his skepticism, Fratantoni said the labor market does appear to be holding together “reasonably well,” which he thinks will result in the Federal Reserve’s current interest rate policy staying the same.
“MBA expects that the Fed will hold off on rate cuts for the foreseeable future, and there is enough concern about the labor market to keep at least some potential homebuyers hesitant about their own job situation,” he said.
Despite Williamson’s differing view on the labor data, he too feels that consumers may remain hesitant to jump into the housing market.
“The steadier labor market footing may help improved housing fundamentals translate into stronger sales activity. On paper, conditions look better than they did a year ago: affordability has improved, supported by lower mortgage rates and income growth that has outpaced house price growth; inventory is higher; and buyers have more room to negotiate,” he said.
“But those gains only matter if households feel confident enough to act. Rising mortgage rates have pared back some of the improvement, and buyers worried about the economy are more likely to stay cautious. A labor market that is holding firm won’t solve affordability, but it can give would-be buyers more confidence to move from browsing to bidding.”