EconUpdate by P. Duffy
Job growth rebounds to 559,000 in May, unemployment rate edges down to 5.8 percent
What does this mean? Although heading in the right direction, the job market recovery needs to accelerate in order to more quickly fill the jobs lost during the pandemic.
Total nonfarm payroll employment rose by 559,000 in May, and the unemployment rate declined by 0.3 percentage point to 5.8 percent, the U.S. Bureau of Labor Statistics reported today. Notable job gains occurred in leisure and hospitality, in public and private education, and in health care and social assistance. Among the unemployed, the number of persons on temporary layoff declined by 291,000 to 1.8 million in May, while the number of permanent job losers decreased by 295,000 to 3.2 million.
Employment Trends Index rises 2.92 percent in May and 39.4 percent year-on-year
What does this mean? Labor shortages are pushing up wages, but this is expected to ease over the next six months.
The Conference Board Employment Trends Index (ETI) significantly increased in May, after an increase in April, rising 2.92 percent from April and 39.4 percent year-on-year. Past index data had signaled growing labor shortages, but the most recent data strongly reinforces this trend. Job shortages are likely to be more acute in those states that opened first, less in those that still have restrictions. Toward the end of 2021, labor shortages are likely to ease as some of the labor supply constraints moderate.
Redfin: Both pending home sales and asking prices slip in May
What does this mean? Although too soon to tell, buyers may be pulling back from the frenzy of the past few months.
The housing market’s temperature may be starting to drop by a degree or two. Pending home sales fell 3% from the four-week period ending May 2, compared to a 2% increase over the same period in 2019. Compared to 2020, they are up 38%. Asking prices fell $2,500 from the four-week period ending May 23 to a median of $354,975, up 11% from the same period in 2020. Active listings (the number of homes listed for sale at any point during the period) fell 37% from the same period in 2020.