Economist's Commentary: May 2, 2008

Quick Take on the Economy: May 2, 2008

By Lawrence Yun, NAR Chief Economist

Payroll employment (based on company data) fell by 20,000 in April, bringing net job losses to 260,000 in the past four months. The latest net job cut is milder than the 80,000 or so monthly job cuts of the past three months.
Employment based on household survey (asking people if they have jobs) rose by 362,000. This data is more volatile and gets less notice. But this data captures many not on company payrolls, like farmers and independent entrepreneurs.
The unemployment rate fell a notch to 5.0 percent as this is based on household survey and not company data.
The construction sector lost additional 61,000 during the month. The total loss is nearly a ½ million in this sector from peak employment in mid-2006.
Solid job gains were observed in professional-business service, education, and health service sectors.
Wage growth slowed to only 3.4 percent from a year ago. People had been receiving 4 percent annual wage gains in the last two years.

Orders for manufactured products rose in March after falling in the past two months.
Farm machinery was one of the items to rise solidly during the month and over the past 12 months. Rising food prices are encouraging more production.

The worst in the economy may be passing. Job gains could begin to show up within a couple of months.
The financial market is beginning to incorporate this assessment. Stock market has been notably higher during the week as investors switch out of the safe Treasury bonds.
People moving out of bonds also mean modestly higher interest rates – and mortgage rates.

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

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