Even with the delta variant of the coronavirus spreading through the country, July’s job report was surprisingly positive.
On Friday, the U.S. Labor Department announced 943,000 new jobs were added last month, jumping past the expected totals of 865,000. That’s up from 938,000 that were added in June — the highest month-to-month growth since August of 2020.
The unemployment rate also fell to 5.4%, down from 5.9% in June. That marks the lowest jobless rate since March of 2020, when the COVID-19 pandemic was in its infant stages.
“The increase in [job] participation is a welcome sign given that it has been slow to recover toward its pre-pandemic level,” said Doug Duncan, Fannie Mae chief economist.
In a July press conference, President Joe Biden noted more than 3 million jobs have been created since he took office ― the most of any president in the first five months of their term — and said that approximately 70% of the jobs lost at the start of the pandemic have been recouped. If monthly gains continue at the June pace, economists predict the U.S. could return to the pre-COVID employment peak by February 2022 – the same year some economists predict the housing market could regain its inventory footing.
More than 13,273 loans – or $4359 billion in volume – were originated or refinanced in the past 12 months. That means millions of closings and new tax line set-ups, often done quickly, and, in many cases, while working remotely.
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“We continue to forecast that the unemployment rate will drop to 4.5% by the end of the year,” said Mike Fratantoni, Mortgage Bankers Association senior vice president and chief economist.
Leisure and hospitality payrolls rose by 380,000 in July, comprising more than a third of the month’s total jobs gains. Of that 380,000, 253,000 were added in food and drinking establishments, along with hiring gains in lodging and in arts, entertainment and recreation. In the private sector, education and health services employment increased by nearly 90,000. Government payrolls were up by 240,000 last month.
Average hourly earnings rose 0.4% month to month.
As for the housing market, residential building jobs increased 0.9% month-over-month in July, and have surpassed pre-COVID levels, noted Odeta Kushi, First American deputy chief economist. Overall, construction jobs added 11,000 employees in July.
“It’s good to see progress, but it’s not enough,” Kushi said. “Since hammers build homes, labor shortages increase the cost of building and slow the pace of construction, which is not what’s needed to alleviate the housing supply shortage.”