The unemployment rate moderately fell to 3.7% in September, according to the latest Employment Situation Summary report from the U.S. Bureau of Labor Statistics.
The report indicates that Hurricane Florence affected parts of the East Coast during the September reference periods for the establishment and household surveys, however response rates for the two surveys were within normal ranges.
But what does it mean for the housing market? The answer is mixed.
“Job growth in September was positive yet slower compared to recent months, while the unemployment rate is low at 3.7% and wages are slowly pushing up. However, more jobs and higher wages are not the only key factors for home buying. The tightening labor market, along with some pick up in wages and prices, have forced the Federal Reserve to raise interest rates. Another rate hike after this year’s election is expected and higher mortgage rates in turn will hold back home sales in high-priced markets. Lower-priced markets will be supported by job growth,” said NAR Chief Economist Lawrence Yun.
According to the report, the number of unemployed persons decreased from 6.2 million in August to 6 million in September.
The jobless rates for all other groups, including men at 3.4%, women 3.3%, teenagers at 12.8%, whites at 3.3%, blacks at 6%, Asians at 3.5% and Hispanics at 4.5% — these all showed little or no change over the month.
Total non-farm payroll employment increased by 134,000 in September, compared with an average monthly gain of 201,000 over the past 12 months.
The majority of job gains in September can be attributed to an increase in jobs in professional and business services, transportation and warehousing and healthcare.
Here are some of the areas which showed notable changes in September:
- Employment in professional and business services increased 54,000
- Employment in transportation and warehousing increased 24,000
- Employment in healthcare increased 26,000
In September construction employment increased by 23,000 jobs and increased by 315,000 over the year.
The average workweek for all employees on private nonfarm payrolls remained steady at 34.5 hours in September.
Realtor.com Chief Economist Danielle Hale steady economic growth and consumer confidence resulted in a robust September job report.
“Unemployment declined to 3.7%, hitting a 49-year low and wage growth continued its steady upward trend,” Hale stated.
“Although September’s wage increase pales in comparison to growing home prices — which rose another 7% last month — any increase is helpful for buyers trying to get in the market,” Hale continued. “However, if this growth is seen as a sign of higher inflation, it could prompt mortgage rate increases, which would eat into home buying power.”