Economist's Commentary: June 6, 2008

Quick Take on the Economy: June 6, 2008

By Lawrence Yun, NAR Chief Economist

The nation's unemployment sharply jumped in May to 5.5 percent from 5.0 percent the prior month. The number of unemployed grew by nearly one million. That is a substantial increase over a one month time span.
The sharp jump could be partly due to the catch-up impact of having shown fairly low unemployment in prior months, somewhat inconsistent with other economic data. It could also be due to seasonal adjustment factors that are less stable in July due to inflow of new young job seekers who seek employment in summer.
Payroll employment fell by 49,000 over the month - marking five straight months of decline from the beginning of the year.
Wages rose by 5 cents or by 3.5 percent over the 12 months. This increase from adding to inflationary pressure is not significant.
Job data is usually a lagging indicator of economic activity. The economy was slow in the past two quarters. The economy looks to be better in the current quarter and in the second half of the year.

The job market is not stable, but is anticipated to stabilize in a month or two based on other economic activity data.
Job growth will be required going into second half to help home sales because mortgage rates are anticipated to rise modestly.

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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