Nonfarm payroll employment increased by 213,000 in June, but overall unemployment in the country rose 0.2 percent to 4 percent last month, according to the latest data from the U.S. Department of Labor’s Bureau of Labor Statistics.
The total number of unemployed persons in the country increased by 499,000 to 6.6 million, month-over-month. Employment is still ahead of where it was in June 2017 when the jobless rate was 4.3 percent and the number of unemployed was 7 million.
“The increase was the biggest since June 2016 but is not cause for concern,” said Tendayi Kapfidze, the chief economist at LendingTree. “The unemployment rate increase was driven by more workers entering the labor market and looking for jobs, which pushed the participation rate up to 62.9 percent.”
The real estate industry added 3,800 jobs, according to the new data. Approximately 300 jobs were reported lost in the rental and leasing services sector.
An increase in construction jobs could also foreshadow some good news for the real estate industry, according to Mark Fleming, the chief economist of First American.
“This month’s increase by nearly 4,000 residential construction jobs compared to May, a 0.5 percent increase, sends a positive message to homebuyers and the housing market, as it indicates further increases in housing starts are likely and more housing supply may be on the way,” he said. “It’s very hard to have one (housing starts) without the other (residential construction employment).”
“Specifically for the housing market, residential construction employment increased, which is critically important to increase the pace of housing starts and add more housing supply to the market,” he added. “Building a home does not readily lend itself to outsourcing and automation. Homebuilding still requires manual labor as a key input into the production process.”
Lawrence Yun, the chief economist at the National Association of Realtors said that the strong jobs numbers and low unemployment will mean more people looking for homes, but inventory remains a challenge.
“Part of the housing inventory shortage is due to the lack of construction workers,” said Yun. “One encouraging aspect of the latest job report is the boost in the number of people seeking work.”
“With more people entering the labor force and seeking work, some may turn to the higher paying construction industry,” he added. “A typical non-supervisory worker in the private sector earns $22.62 per hour. In the construction industry, the pay is $27.56.”