Quick Take on the Economy: April 4, 2008 By NAR Chief Economist Lawrence Yun Employment Report
·Payroll employment (based on company survey data) fell 80,000 in March. The data was revised lower for prior months, so there have now been 3 straight months of job cuts totaling 232,000. Over a 12-month span, only 536,000 jobs have been added - compared to 2 to 3 million one-year job additions that would normally occur under normal conditions.
·Household employment (based on a survey of asking people if they have jobs) fell by 24,000.
·The unemployment rate increased to 5.1 percent from 4.8 percent the month prior. The labor force - the number of people searching for jobs -increased by 410,000 during the month.
·The construction sector took a big hit with 51,000 fewer payroll jobs and the manufacturing sector continue to bleed with 48,000 fewer jobs. The manufacturing sector has shed nearly 4 million jobs in the past 10 years.
·Jobs in the service sector rose modestly by 13,000. But the higher paying jobs in the Professional Business Service fell by 35,000 - these are the jobs that most impact office net absorption.
·Big job gains occurred in Education and Health Services, where 42,000 jobs were added. Government jobs rose by 18,000.With the weakening job market, the wage growth also slowed to $17.86, a 3.6% increase from one year ago.
·Yesterday's data on first-time and continuing jobless claims had increased notably and took place after the surveying period of today's overall report on employment. That means, that job cuts will most likely continue in the next month's employment report.
·Any good news in the data? (1) Household employment figures had been falling steeply in the past few months, but the latest decline is much more modest and household employment has shown a bit of leading information in the past about payroll employment trends; (2) slower wage growth means lower inflationary pressure, which in turn, permits more easing room for the Fed to cut interest rates What does today's data mean for REALTORS® and consumers?
·This employment report is the most closely watched economic data. On jobs, we are in a recession. Production wise, we are very close to recessionary conditions - because companies are squeezing additional output with fewer workers.
·Recession is certainly not good news. However, the housing market performed well in the last recession due to exceptionally low interest rates. Though we currently also have low rates, the confidence issue is likely to be a bigger factor this round and recession does not help.
·There is a better chance for legislation on tax credits for homebuyers.
This article is from NAR's website @ www.realtor.org Economist's Commentary 4/4/08
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