Friday’s employment report for April from the Bureau of Labor Statistics showed strong growth overall, with a total increase in non-farm payroll jobs of 211,000, compared to March’s increase of 79,000. Department of Labor Secretary Alexander Acosta tweeted that the report was “great news,” and noted the unemployment drop to 4.4 percent.
Despite the overall optimism, the housing and construction employment numbers didn’t see quite this level of growth, and the 5,000 new jobs created in this sector were called a “disappointment” by First American Chief Economist Mark Fleming. Fleming noted that this growth is a 2.6 percent increase from a year ago.
“Home builders are reporting that the lack of construction workers is hampering their ability to increase production, which is a desperately needed source of supply, as most markets already have very tight inventories of homes for sale,” said Fleming. “In fact, we have been underbuilding residential housing relative to demand since 2009.”
Realtor.com Senior Economist Joseph Kirchner voiced a similar concern, stating his disappointment in April’s numbers. The 5,000 construction jobs that were added are just “a fraction of what we need,” said Kirchner, “and it won’t solve the inventory problems that stop consumers from finding homes to buy.”
Not all is lost, though. The overall employment rate is still high and unemployment is dropping. Fannie Mae Chief Economist Doug Duncan noted that the U6 rate, the broadest measure of labor underutilization, fell to its lowest rate since November 2007. To Duncan, these are positives that send a clear message.
“The labor market is tight, with continued declines in discouraged workers and part-timers who prefer full-time jobs,” said Duncan. “The report is consistent with a faster pace of monetary policy normalization this year and supports our expectation of two rate hikes in June and September and a change in the Fed’s reinvestment policy in December.”