Mixed Jobs Data, Home Sales Beat Forecasts

Labor market data sent mixed signals, but the housing market continued to show resilience as home price forecasts and new home sales remained strong. Here are the key takeaways.

·       Strong Headline Jobs Number, Softer Details Underneath

·       ADP Jobs Data Shows a Split Market

·       Additional Labor Data Paints a Mixed Picture

·       New Home Sales Exceed Expectations

·       Home Price Forecast Highlights Buyer Potential

Strong Headline Jobs Number, Softer Details Underneath

April job growth came in above expectations, according to the latest report from the Bureau of Labor Statistics (BLS). The economy added 115,000 jobs, compared with forecasts for about 60,000, while the unemployment rate held steady at 4.3%.

What’s the bottom line? At first glance the report looks encouraging, but revisions have also made the BLS data more volatile. For example, March job gains were revised slightly higher, while February showed a much larger decline.

Looking deeper into the report, full-time employment fell by 424,000 jobs, while part-time employment increased by 123,000. The number of people working part-time for economic reasons, which includes workers who would prefer full-time jobs but could not find them, also jumped by nearly 450,000.

Another trend worth watching is where job growth is occurring. Much of the recent hiring has come from Health Care and Social Assistance, reflecting growing demand from an aging population, but not necessarily signaling broad-based strength across the overall economy.

ADP Jobs Data Shows a Split Market

Private employers added 109,000 jobs in April, topping most forecasts. But the headline masks important differences across company size and sector.

Job growth was strongest among small and large businesses, while mid-sized firms added very few jobs, showing signs of softness.

What’s the bottom line? ADP Chief Economist Dr. Nela Richardson explains that large companies have more resources to invest, while small businesses benefit from flexibility, giving both an edge in today’s complex labor market. However, she noted that many small business roles tended to be part-time or lower paying.

Hiring was also concentrated in a few sectors, led by education and health services, which tend to be more stable during economic slowdowns.

Regarding pay growth, workers who change jobs are still seeing faster wage growth (6.6%) than those who stay put (4.4%), but the gap has narrowed compared to recent years. In other words, the job market is becoming less competitive overall.

Additional Labor Data Paints a Mixed Picture

Revelio Labs reported 66,400 job gains in April. While this is still a modest level of hiring, it was the strongest monthly increase since last June and higher than the previous six months combined.

At the same time, job openings edged down to 6.87 million in March from 6.92 million in February, remaining far below the more than 12 million openings seen in 2022. The true number of openings may be somewhat lower, since some remote positions are posted in multiple locations.

New unemployment claims remain relatively low at around 200,000. However, that figure may not fully reflect labor market stress, as some displaced workers are turning to gig or freelance work instead of filing for unemployment benefits.

Meanwhile, continuing unemployment claims (which measure people still receiving benefits) remained elevated at 1.77 million, suggesting it’s taking longer for many job seekers to find new roles.

Challenger, Gray & Christmas also reported 83,387 job cuts in April, up from roughly 60,000 in March. AI-related restructuring was cited as the leading reason for layoffs for the second straight month. Hiring plans also dropped 69% month over month to about 10,000.

What’s the bottom line? While some labor market indicators have stabilized, signs of slower hiring and underlying softness remain.

New Home Sales Exceed Expectations

The Census Bureau released its delayed February and March new home sales data following last fall’s government shutdown, and both reports came in stronger than expected. Sales rose 9% month-over-month in February and another 7.4% in March, marking a combined nearly 17% increase since January.

What’s the bottom line? Some headlines focused on a 5.3% drop in the median home price from February to March, suggesting builders are cutting prices due to market challenges.

But a closer look tells a more complete story. Since the median price reflects the midpoint of all sales, it can shift based on what’s selling most. In this case, there was a noticeable increase in homes sold under $500,000 and fewer above that point, helping explain the dip in the median.

Note that a drop in the median price is not the same as declining home values. In fact, broader home price trends and forecasts continue to point toward steady appreciation.

Home Price Forecast Highlights Buyer Potential

Home prices inched up 0.4% from February to March, according to Cotality’s latest Home Price Insights report, and are also 0.4% higher than this time last year.

What’s the bottom line? The longer-term outlook remains positive. Cotality now expects home prices to rise about 5.1% over the next year, slightly higher than their previous 4.7% projection.

This underscores an important idea: real estate can build wealth over time. For instance, a $500,000 home appreciating by 5% would gain about $25,000 in a year, showing how steady growth can add up.