Unemployment figures released last Friday in the jobs report by the U.S. Bureau of Labor Statistics show a slight increase in unemployment from last month at 3.9% for October. The report's findings on unemployment are key to understanding economic trends and their impact on the housing market, influencing consumer spending, loan eligibility, and housing market activities.
While unemployment increased slightly by 0.1 percentage points over the last month, October's figures mark a 0.5 percentage point increase since April's recent low of 3.4%. This gradual uptick in unemployment could shrink the pool of homebuyers, affecting housing demand and prices.
As seen in a publication by the Federal Reserve Bank of St. Louis, there is a strong correlation between increased house prices and decreased unemployment at the county level. However, changes in unemployment levels can differ across counties.
These new figures point toward the ongoing bifurcation of the housing market, with stronger home price appreciation within specific metropolitan areas than others. Navigating the landscape requires careful attention to underlying local trends, such as unemployment, income, and migration, which we will continue to explore in Plotify Insights.
Plotify’s Takeaway:
- October's unemployment rate increased to 3.9%, a slight 0.1 percentage point rise from last month.
- Unemployment is up 0.5 percentage points since April, potentially diminishing the pool of homebuyers.
-Prices within each housing market are impacted differently by unemployment trends due to local labor market dynamics and underlying housing supply and demand characteristics.
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