Diverging surveys prompt close monitoring of US job growth
In February, the US job market saw an addition of 275,000 jobs, but a slight increase in the unemployment rate to 3.9% presents a complex picture that economists are paying close attention to.
Fannie Mae chief economist Doug Duncan reflected on the report’s implications: “This morning’s jobs report... points to a labor market that remains reasonably strong.” However, Duncan expressed concern over diverging signals between the payroll and household surveys, hinting at a potential softening in payroll growth as the year progresses.
Adult women and teenagers saw their unemployment rates tick up last month, while the figures for adult men, Whites, Blacks, Asians, and Hispanics held steady. Notably, the count of those who’ve lost their jobs for good climbed by 174,000 to reach 1.7 million, yet the number facing temporary layoffs didn’t budge.
The long-term unemployed remained at 1.2 million, making up 18.7% of the unemployed. Meanwhile, participation in the workforce held steady at 62.5% for the third month running.
On the part-time front, the situation was relatively stable, with about 4.4 million people working part-time for economic reasons, such as reduced hours or the inability to find full-time work. Similarly, the pool of folks not actively looking for work but still wanting a job hovered around 5.7 million.
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Echoing the complex nature of the current labor market, National Association of Realtors (NAR) chief economist Lawrence Yun described the latest job figures as presenting a “mixed picture.” He pointed to stagnant home sales activity in 2023 as indicative of potential demand waiting on the sidelines, contingent on short-term improvements in mortgage rates and inventory.
“Job additions build up the long-term real estate demand for housing, retail spaces, warehouses, and hotel travel, but not necessarily for office spaces. The short-term timing of purchase is dependent upon mortgage rates and inventory availability,” Yun said.
Joel Kan, from the Mortgage Bankers Association (MBA), also weighed in, noting the slight rise in unemployment since August 2023 but maintaining that the low rate remains historically favorable. At the same time, he acknowledged the significant contributions from service sector employment to the recent job growth.
“The strength in the job market, along with an economy that is still growing at a moderate pace, are positives for the housing market, as it supports home purchase activity and helps borrowers to stay current on their mortgage payments. However, the labor market’s continued resiliency is one of several factors keeping mortgage rates from declining much further in the near term, as it increases the likelihood that the Fed will not rush to cut rates,” Kan said.
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