Wages increased in February for the seventh straight month, according to the BLS’ latest report. (iStock)
The latest figures show that employment rose by 275,000 people in February, marking the second consecutive month of strong employment growth. Overview of employment situation According to the U.S. Bureau of Labor Statistics (BLS).
Employment growth fell short of January’s original figure of 353,000 jobs, but was higher than the revised figure, which showed employment growth of just 229,000. The total for December and January was 167,000 fewer than the previous announcement. Employment gains in February were seen in multiple industries, including health care, government, food service and restaurants, social assistance, and transportation and warehousing.
The unemployment rate rose 0.2 points from the previous month to 3.9%, and the number of unemployed people in the country increased by 334,000 to 6.5 million. Since March 2022, the unemployment rate has ranged from 3.4% to 3.9%, according to the BLS.
Average hourly wages for private sector employees rose 4.3% last year, and 0.1% month-on-month. This means that wages have been in the 4.3% to 4.5% range for the seventh month in a row, continuing real growth in workers’ purchasing power, excluding housing. Continued wage increases will not bring inflation closer to the Federal Reserve’s 2% target, potentially delaying plans to cut interest rates.
“There are some recent findings that indicate inflation was higher than expected,” Dan North, senior economist at Allianz Trade Americas, said in a statement. “If this jobs report continues to show strong job growth and wage increases, the Fed may not cut rates until September, which certainly makes this report very important. The classic good news can be the same as bad news. The good news of a strong labor force is” The market is delivering bad news of a rate cut, but a rate cut seems even further away. ”
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Housing prices continue to outpace wages
Despite their resilience, home price growth has outpaced wage growth. Home prices are currently 5.5% higher than this time last year, according to the latest S&P CoreLogic Case-Shiller Index. report.
The 10-city total increased by 7% annually, up from a 6.3% increase in the previous month. At the same time, the 20-city composite recorded a 6.1% increase, up from the previous month’s 5.4% rise. The rise in home prices comes even as borrowers struggle with high mortgage rates.
Daniel Hale, chief economist at Realtor.com, said one of the keys to lowering housing costs and rents is adding more homes to the market. According to Realtor.com’s analysis of housing supply and household formation, the United States has built between 2.5 million and 7.2 million fewer homes than households over the past decade.
“More housing would ease cost pressure on one of the biggest budget items for families and remove inflationary pressures,” Mr Hale said.
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Homebuyers can obtain relief in other ways.
Sustained increases in wages and employment means potential homebuyers currently prevented from purchasing a home due to affordability are likely to receive little relief from high borrowing costs. It means.
However, there is one bright spot for first-time home buyers. President Joe Biden announced a plan to help first-time buyers recoup high borrowing costs during his State of the Union address Thursday night. If Congress passes the Mortgage Relief Credit, it would give middle-class first-time homebuyers a $5,000 annual tax credit for two years, according to one report. fact sheet Awarded by the U.S. Department of Housing and Urban Development (HUD).
“This equates to lowering the median mortgage rate by more than 1.5 percentage points over two years, and will help more than 3.5 million middle-class households purchase their first home over the next two years,” HUD said. It will be helpful.”
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