Jobs, Jobs and More Jobs
The U.S. economy continues to expand and added another 201,000 jobs last month. This is slightly above the last 12 months’ average of 194,000 new jobs.
Most major categories contributed to last month’s gain, notably was Professional Services, which saw its employment grow by 53,000 positions in August. The Construction industry grew by another 23,000 workers.
But several industries experienced employment losses last month — which is not unusual. In fact, the August loss in Manufacturing jobs is the first time that employment shrunk in that category in a year; it’s too early to tell, however, if these losses can this be attributed to the trade disputes currently under way.
Other areas with employment losses in August were Retail, down by 5,900 jobs; Information losing 6,000 jobs, and Governmentemployment, which fell by 3,000 jobs.
More Good News in the Remodeling Markets
As employment at Remodeling Firms rose by 2,800 jobs in July (data for this industry is always one month behind), homeowners’ spending for remodeling also increased in July.
The spike in employment brings the number of employees working in remodeling firms to 354,000 — the largest number ever employed in this industry segment. The only other area within the construction industry with robust growth was Plumbing & HVAC Contractors, which also set a record in July at 1.12 million workers.
Spending for remodeling among homeowners rose by 2.1% in July to reach an annual rate of $214 billion. The July gain partly compensated for the losses in the previous two months, when spending had fallen by 3.3%. Also, employment in July is still lower than the peak spending level of $216.7 billion reached in May.
Mortgage Rates Inch Up Again
Another week, another marginal uptick in mortgage rates. Last week the 30-year fixed rate rose by two basis points (0.2%) to 4.54%. Despite these increases, mortgage rates are still hovering at their lowest levels since early May.
Mortgage rates are expected to rise in the future. The Federal Reserve Bank, which has the power to influence interest rates, is bound to tighten policy, thus forcing rates up. Moreover, the strong economy is beginning to exert inflation pressure, which will in turn put pressure on interest rates.
Manuel Gutierrez, Consulting Economist to NKBA
Explanation of NKBA’s Economic Indicators Dashboard
Note that all the data, except for “mortgage rate” and “appliance-store sales” are seasonally adjusted and are represented at annual rates.
Remodeling Expenditures. This is the amount of money spent on home improvement projects during the month in question. It covers all work done for privately owned homes (excludes rentals, etc.). The data are in billions of dollars and are issued monthly by the U.S. Department of Commerce.
Single-Family Starts. This is the number of single-family houses for which construction was started in the given month. The data are in thousands of houses and are issued monthly by the U.S. Department of Commerce.
Existing-Home Sales. These data are issued monthly by the National Association of Realtors and capture the number of existing homes that were sold in the previous month.
High-End Home Sales. This series are sales of new homes priced at $500,000 and higher. The data are released quarterly by the U.S. Department of Commerce and are not seasonally adjusted. Thus, a valid comparison is made to the same quarter of prior year.
Mortgage Rate. We have chosen the rate on 30-year conventional loans that is issued by the Federal Home Loan Mortgage Corporation (known popularly as Freddie Mac.) Although there are a large number of mortgage instruments available to consumers, this one is still the most commonly used.
Employees in Residential Remodeling. This indicator denotes the number of individuals employed in construction firms that do mostly residential remodeling work.
Building-Materials Sales. These data, released monthly by the Department of Commerce, capture total sales of building materials, regardless of whether consumers or contractors purchased them. However, we should caution that the data also includes sales to projects other than residential houses.
Appliance-Store Sales.This driver captures the monthly sales of stores that sell mostly household appliances; the data are stated at an annual rate. We should not confuse this driver with total appliance sales, since they are sold by other types of stores such as home centers.
We hope you find this dashboard useful as a general guide to the state of our industry. Please contact us if you would like to see further detail.
