The Week Ahead: Signs of Improvement in Labor Market

The U.S. Department of Labor will release its initial jobless claims on Friday.

This report will come just a week after the Bureau of Labor Statistics revealed the U.S. economy added 4.8 million jobs. The unemployment rate fell to 11.1%.

Data found the total number of unemployed people fell by 3.2 million to 17.88 million. Unemployment rates decline in June for adult men (10.2%); adult women (11.2%); teenagers (23.2%); African Americans (15.4%); and Hispanics (14.5%).

The number of unemployed Americans who were temporarily laid off fell by 4.8 million in June to 10.6 million. This comes after that sector of the market fell by 2.7 million in May.

However, the labor force participation rate rose by just 0.7 percentage points in June to 61.5%—1.9 percentage points below pre-pandemic levels.

Odeta Kushi, First American’s Deputy Chief Economist, said the labor market’s improvement will “likely stall out” if COVID-19 is not contained.

She noted housing has been one of the few sectors to experience a V-shaped recovery, however, said the course of recovery is dependent on the health of the labor market.

“The wages data for the last couple of months has reflected the underlying shifts in hiring for low-wage workers. The case for housing recovery is that, even if wage growth and thereby household income moderates or falls slightly, historically low mortgage rates would continue to boost house-buying power,” she said.

Realtor.com’s Chief Economist Danielle Hale said the slow reopening efforts are brining workers back on the payroll and the market is “clearly moving in the right direction.” This direction will help consumers gain confidence in buying big-ticket items, such as homes.

Also coming this week is an exclusive interview with Rob Dietz, Chief Economist, National Association of Homebuilders (NAHB) on DS5: Inside the Industry. Dietz will discuss how COVID-19 has impacted the residential construction industry.

 

Here's what else is happening in The Week Ahead:

DS5: Inside the Industry—Rob Dietz, Chief Economist, NAHB (Monday)

NAR Home Affordability Index (Thursday)