Climbing housing market slowed by tepid jobs recovery
Increased home sales and rising home prices set the construction sector up for potential growth, but the overall job market remains lackluster.
Job cuts in the financial services sector rose from year ago levels in just the first six months of 2012. So far, 36,762 positions have been slashed in financial services, up from 20,196 cuts a year ago, according to research firm Challenger, Gray & Christmas.
Total workforce reductions reached 39,372 in June, an 8.2% increase from the 36,398 cuts recorded a month earlier.
But rising job cuts is not a death knell for the economy.
Despite the tick up in job cuts, John Challenger, CEO of Challenger, Gray & Christmas, said, "Right now, job cuts are on track to the have the second-lowest annual total since 2000. We are heading into the third quarter, which is typically the slowest period for downsizing."
"Meanwhile, home building, home sales and home prices are all on the rise, which bodes well for the overall economy, as it not only gets construction workers back on the job, but it fuels all kinds of economic activity, such as home improvement projects, hiring movers, buying new furniture and appliances, stocking new homes with food and household items, and so forth," he added.
Furthermore, jobless claims for the week ending June 29 showed slight improvement with benefit requests falling by 5,000 applications to a total of 343,000 filings, the Department of Labor said.
Private sector employment also grew by 188,000 jobs from May to June, according to new data from the ADP National Employment Report.
Constructions payrolls rose by 21,000 in June: the biggest gain since January.
"The job market continues to gracefully navigate through the strongly blowing fiscal headwinds. Job gains are broad based across industries and businesses of all sizes," said Mark Zandi, chief economist of Moody’s Analytics.