U.S. unemployment fell to 6.7 percent in November, according to the U.S. Bureau of Labor Statistics. This past month, the economy added 245,000 jobs—the slowest month of growth since recovery began.
“These improvements in the labor market reflect the continued resumption of economic activity that had been curtailed due to the coronavirus (COVID-19) pandemic and efforts to contain it. However, the pace of improvement in the labor market has moderated in recent months,” said the jobs report. “In November, notable job gains occurred in transportation and warehousing, professional and business services, and health care. Employment declined in government and retail trade.”
In the financial activities sector (including real estate), 15,000 new jobs were added, but employment here is 115,000 lower than in February, according to the report. Construction gained 27,000 jobs in November, but employment is 279,000 below its
February level. In November, employment rose in residential specialty trade contractors
(+14,000) and in heavy and civil engineering construction (+10,000).
How the Industry Is Responding:
“The housing market has been soaring despite the subdued job market due to the record low mortgage rates. However, the rates will not fall further, so the jobs recovery becomes even more important to sustain home-buying. Jobs are also critical for commercial real estate. In November, the economy added 245,000 jobs, the slowest monthly addition since the reopening of the economy in May. Also, from May to November, 12.3 million jobs have been added but that still leaves us with another 9.8 million jobs needed to get us back to pre-pandemic employment levels. Job additions have to pick up significantly or it will take another three years to get us back to normal, not even accounting for all the new college graduates who will be searching for jobs during this time.
“The decline in the unemployment rate to 6.7 percent should be discounted, since the labor force participation rate declined. Fewer people looking for work is not a good sign.
The construction sector added only 27,000 new jobs in November—a bit light considering we need a greater supply of new homes. Therefore, the tight housing inventory situation is likely to be with us for a while.” — Lawrence Yun, Chief Economist, National Association of REALTORS®
“The pace of employment growth slowed in November, partially due to a loss of government jobs tied to the 2020 U.S. Census count, but also reflecting a slowdown in private sector job growth. A notable bright spot was the gain in construction jobs in the residential sector, another sign that the strong housing market continues to lead the overall economy. The decline in the unemployment rate is a positive, but there are 10.7 million people who are unemployed, and an increasing number of long-term unemployed—those out of work for more than 26 weeks. Moreover, the decline in labor force participation helped to decrease the unemployment rate, as some stopped looking for work and were not counted as unemployed.
“Over the last three months, private sector job gains have averaged 717,000 per month, a slowdown from the rapid recovery over the summer, but still an impressive pace. However, the pace of improvement is clearly slowing in the face of an uptick in the intensity of COVID-19 cases and the mitigation efforts to slow the spread. Certain segments of the economy—particularly in-person service sector jobs—are going to be slower to come back from this environment. We do expect that the ongoing improvement in the job market will continue to support the strong housing market. That is why our forecast calls for a record year in 2021 of purchase origination volume.” — Mike Fratantoni, SVP and Chief Economist, Mortgage Bankers Association
