KEY MARKET INDICATORS as of Oct 09, 2017
September Jobs Report
Hurricanes Harvey and Irma delivered a shock to the September jobs market report, driving the total number of jobs down 33,000 for the month. This was the first month-over-month decline in the number of jobs in 7 years, but will be reversed in the coming months as recovery efforts pick up and businesses get back to normal. Around 1.5 million people reported this month that they had a job but were not at work because of bad weather. But beyond this temporary setback, the September jobs report had other surprises. Unemployment rate fell to 4.2% – the lowest point since February 2001. Wage growth over the past few months has also been revised up and reached 2.9% in September. However, given the magnitude of disruption in September, it is not clear if the faster wage growth will hold up since job losses in September mainly came from lower-income workers from the tourism industry. By removing lower-income workers, this report may have artificially increased average earnings in September. What is clear is that we are close to the peak of the economic cycle.
The impact of hurricanes is most clearly shown in the industry-level job growth. Tourism (leisure and hospitality) lost a seasonally adjusted 111,000 jobs in September. Most of the job losses came from the restaurant industry, which lost 105,000 jobs. Prior to September, tourism added an average of 30,000 jobs a month. Construction was also impacted. It added 8,000 jobs in September, down from 15,000 a month average seen in earlier months. Construction remains the fastest growing sector in the economy outside of mining. Most of the growth in construction jobs this year has come from the housing sector. In September, housing-related jobs were down 3,500 compared to August.
Homebuilders reported fewer jobs, while residential contractors reported slower hiring. The job market continues to be very positive for potential first-time homebuyers. Unemployment rate for people in the primary homebuying age (25-34 and 35-44) was 3.8% in September, the lowest point since 2007.
* FHFA Purchase-Only Home Price Index