Economist's Commentary: September 5, 2008

Quick Take on the Economy: September 5, 2008

By Danielle Hale, Research Economist

The civilian unemployment rate rose 0.4 percentage points to 6.1 percent in August according to the household survey. This level surpasses the 5.8 percent most economists expected and is a high not seen since 2003.
Non-farm payrolls as measured by the establishment survey declined by 84,000 in August. This is also somewhat higher than the figure most economists expected.
Positive notes in the data were hours, which remained constant in August, and earnings, which increased modestly in the last month. Over the past 12 months, average hourly earnings increased by 3.6 percent and average weekly earnings rose by 3.3 percent for private production and nonsupervisory workers.

Each month the Bureau of Labor and Statistics releases information on the employment situation in the US. Their data come from two primary sources: a survey of establishments (businesses) and a survey of households. This month, both surveys showed news that was somewhat worse than anticipated.
The third quarter economic growth is downgraded because of the sharper rise in unemployment.
August's unemployment rate was at a high not seen for five years. In the last business cycle, there was clear improvement in the unemployment rate within six months after unemployment reached this level, but the inflation rate was much lower at that time.
Job growth is a big driver of housing purchases. The job numbers from yesterday and today mean that there are still tough times ahead for Realtors. Buyers with uncertain financial outlooks may be hesitant about making an investment in a home. However, lower interest rates and prices coupled with the first-time homebuyer tax credit and modestly increasing incomes should help to keep the level of sales stable.

This is one in a series of commentaries by the Research staff of the National Association of REALTORS®. Read more commentaries >

NAR members, learn how you can add this commentary to your Web site, blog, or newsletter. Read more >

Comments? Questions? E-mail NAR Research.