July 30, 2021

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Mortgage News

Jobs data released: Massive changes

The US economy created around 266,000 new jobs in April – a significant slowdown from 770,000 in March – the Bureau of Labor Statistics reported today.

What caused the unexpected slowdown in employment growth? Mike Fratantoni, chief economist at the Mortgage Bankers Association, pointed to declines in employment in several sectors.

“While the recreational and hospitality sectors continued to grow, many sectors that saw growth in March actually saw declines, including manufacturing (-18,000), retailing (-400,000), transportation and warehousing (-77,000) and Temporary Employment Services (-111,000), ”he said. “Community education employment increased 31,000 but remains nearly a million jobs below pre-pandemic levels.”

Employment in construction remained unchanged over the month. Employment growth in the industry is up 917,000 year over year but is 196,000 below pre-COVID levels. Fratantoni said this does not coincide with the strong growth in the housing start data, which would imply the need for more workers.

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“Overall, the data contradicts the recent decline in initial unemployment insurance claims and Wednesday’s ADP data, which showed strong growth in private payrolls,” Fratantoni said.

There were hardly any changes for the 9.8 million unemployed and the unemployment rate of 6.1%. The survey data also showed that more workers returned to the office in April. The number of workers teleworking due to the pandemic fell from 21% in March to 18.3%.

On the positive side, more workers were able to add hours of work, with the number of those who worked part-time but who wanted a full-time job falling 583,000 to 5.1 million in April. There was also a slight increase in the average weekly hours from 34.9 hours to 35 hours.

“In recent weeks there has been increasing reports that employers are having difficulty filling vacancies. In addition, the challenges in the supply chain across the economy are likely to affect the pace of activity and increase input costs for many employers, ”Fratantoni said. “We expect robust employment growth and housing demand to continue for the remainder of the year. However, this report suggests that the rate of improvement in the labor market will be much less consistent than other indicators suggest.”