HousingWireHousingWire
The January jobs report is not good news for those hoping that the Federal Reserve will cut interest rates at its meeting in March. In January, the U.S. economy added 143,000 nonfarm payroll jobs compared to a month prior, according to data released Friday by the U.S. Bureau of Labor Statistics (BLS).
This number is slightly lower than originally projected, but economists attribute the slower than anticipated job growth to the impacts of winter storms in the East and South, as well as the wildfires in Los Angeles.
“At first glance, on net, these data indicate a job market that remains reasonably strong,” Mike Fratantoni, the Mortgage Bankers Association’s SVP and chief economist, said in a statement. “Job growth over the past three months has averaged a gain of 237,000, likely above what can be sustained this year.”
Despite the slower job growth, unemployment fell slightly to 4.0%, with 6.8 million people being unemployed.
The majority of the job growth in January occurred in the health care (+44,000 jobs), retail trade (34,000 jobs), and social assistance (+22,000 jobs) sectors.
Employment fell in the mining, quarrying, and oil and gas extraction industry by 8,000 jobs.
The construction industry gained 4,000 jobs month over month, with residential construction adding 1,900 jobs. However, the number of residential specialty trade contractors fell by 2,100 from a month prior. The real estate industry also posted a modest monthly gain, rising by 3,600 jobs month over month.
“Although today’s job report is generally positive, it actually offers up a mixed bag for the housing market. With more jobs being added in relatively high-wage sectors, and overall earnings on the rise, prospective home buyers will feel more confident heading into the spring housing market,” Lisa Sturtevant, the chief economist at Bright MLS, said in a statement. “However, with employers still adding jobs at a healthy pace and inflation above the Fed’s 2% target, the central bank is likely to keep interest rates unchanged at its meeting in March, which means mortgage rates could remain in the high 6% range heading into spring.”
Additionally, Fratantoni and the MBA are anticipating that the Fed will make, at most, one more rate cut this cycle.
