The U.S. job market continued to recover from the impact of Hurricanes Harvey, Irma, and Maria in November, adding 228,000 jobs. Over the past three months, employers have added an average of 170,000 jobs per month – close to the pace of job growth in the first 8 months. This suggests that most of the hurricane-related job market fluctuation is behind us. The job market is at full employment. Unemployment rate was unchanged in November at 4.1%. The headline wage growth remained moderate at 2.5% in November despite a tight labor market. However, our analysis of state-level wage data shows that wage growth in many states are well-above the growth rate reported for the nationallevel. Higher wage growth at this stage of the economic cycle would imply tighter monetary policy and higher interest rates, but would also mean that housing is more affordable than is implied by the headline wage growth and provides support for faster home price growth.
The maturing job market means that it will be harder for the economy to add more jobs. Looking back over the past 11 months, the pace of overall job growth rate has slowed from 1.6% in 2016 to 1.4% this year. The major growth industries this year have been: mining, construction, education and health, and professional and business services. Job growth in the retail sector slowed sharply this year.
The job market continues to be very positive for potential first-time homebuyers. Unemployment rates for people in the primary homebuying age (25-34 and 35-44) are at the same or lower levels as the last economic cycle in 2006-07.