Today’s Jobs Report in Two Gloomy Charts. Something’s Gotta Give.

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Today’s Jobs Report in Two Gloomy Charts. Something’s Gotta Give.

The labor market continues to disappoint. In September, U.S. employers added only 142,000 jobs, well below the 200,000 or more most economists had expected. People aren’t getting raises and fewer adults have jobs or want to work.

This is our second-straight bad report. Last month, economists mostly dismissed the gloomy August jobs data because late-summer employment typically looks bad at first and is revised up later. That didn’t happen this year. Job growth was worse than we thought in August, according to the Labor Department, and surprisingly low in September. A double whammy.

job report
Source: Bureau of Labor Statistics

We also have a worrisome, long-running trend: A smaller share of adults are working or looking for work. Perversely, that’s the main reason the unemployment rate stayed low in September — fewer people are job hunting, so unemployment doesn’t look so bad.

Baby boomers are retiring, which explains some of the trend. But adults 55 and younger are dropping out, too. It’s called labor-force participation, and it’s at its lowest since 1977. That doesn’t bode well for the economy.

jobs report
Bureau of Labor Statistics

What does this have to do with my house?

The housing market continues to be a bright spot in the economy. Sales are brisk, builders are optimistic and the Redfin Demand Index forecasts home prices to rise 5.1 percent this month. Something doesn’t add up.

What strikes me, heading into fall, is the mismatch between jobs and housing,” Redfin chief economist Nela Richardson said. “The labor market is losing momentum while the housing market picks up steam.  Something’s gotta give, the question is what, and when.”

Stay tuned.

Questions? Comments? Lorraine.woellert@redfin.com

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