“Even though the pace of layoffs has picked up, many businesses, particularly in transportation, healthcare, and hospitality, continue to have strong demand for workers,’ Mike Fratantoni (pictured), a senior vice president and chief economist at the Mortgage Bankers Association, said. “Data earlier this week showed that job openings in April increased to over 10 million postings once again.”
Despite the job gains, there are two data points in the report showing signs of somewhat weaker labor demand, the economist said. “Wage growth has slowed to 4.3% over the past 12 months, and the unemployment rate ticked up to 3.7%,” Fratantoni said. “The increase in unemployment was not caused by an increase in the labor force participation rate. The household survey, which is the basis for the unemployment rate, is telling a very different story than the establishment survey this month, one showing weakness in employment, the other strength.”
He predicted what the Fed might do next: “Several Federal Reserve officials have signaled that they are likely to hold rates steady at their upcoming June meeting but are unlikely to reduce rates anytime soon,” he said. “This somewhat mixed jobs report is likely to support that approach.”
Ultimately, job growth is seen as a positive omen for the housing industry, he noted: “The housing market continues to struggle against a lack of supply. A strong job market helps housing demand, particularly in the face of challenging affordability.”
Reacting from a commercial standpoint
For commercial real estate, the job numbers offer a mixed bag. Officials at CBRE reacted to the report and detailed the impact jobs gains might have. “Job growth has remained resilient despite Fed monetary policy tightening,” officials said in a report. “While we expect that the Fed won’t raise rates when it meets this month, additional rate hikes may be necessary later if the economy continues to outpace expectations.”
Source: mpamag.com