News & Events

Economic Advisor: August 9, 2017
August 9, 2017


Construction spending was down, but the single-family home segment bucked the trend. Meanwhile, unemployment dropped slightly, as did layoffs.

Construction Spending

Construction spending for June was a mixed bag where the real estate market was concerned. Overall, construction spending for the month took a dive, falling 1.3 percent to an annual rate of $1.205 trillion, the Census Bureau reported last week. That said, while the monthly drop was stiff, when compared to last year, June was doing alright, coming in 1.6 percent higher than June 2016’s pace of $1.186 trillion.

As a broad category, private construction fell 1.2 percent, with residential construction falling 0.2 percent to an annual rate of $502.9 billion. However, that was largely due to multi-family construction dropping 2.9 percent to a pace of $60.7 billion. Meanwhile, single-family home construction grew by 0.3 percent to hit a rate of $261.3 billion.

Obviously residential construction remains a primary concern for the real estate market, given that narrow supplies of homes for sale have helped pushed home prices outside the reach of many new buyers.


The unemployment rate ticked down slightly falling to 4.3 percent for June from May’s rate of 4.4 percent, according to last week’s report from the Bureau of Labor Statistics. This left seven million Americans out of work for the month.

All told, the economy added 209,000 jobs, which outpaced expectations of 175,000 jobs being gained. Key job growth sectors included food and drink services, professional and business services, and healthcare.

The labor force participation rate — the portion of employable Americans either possessing a job or actively looking for one — came in at 62.9 percent for July, which was little changed from June, but was 0.4 percent up over the year.

July’s number of long-term unemployed — those without a job for 27 weeks or longer — totaled 1.8 million and accounted for 25.9 percent of the unemployed population. This was little changed from June. The number of people involuntarily employed on a part-time basis for reasons such as their hours being cut, or because that was the only work they could find was essentially unchanged at 5.3 million for July.

Ultimately, most economists rendered a “steady as she goes” summation of the Bureau’s July jobs report.

“While the pace of jobs creation in 2017 may not be as strong as the year before, it’s still respectable for mature economic expansion,” Senior Economic Analyst Mark Hamrick told the Los Angeles Times.

Initial Jobless Claims

In related news, first-time claims for unemployment benefits filed by the newly unemployed during the week ending July 29 fell to 240,000, a drop of 5,000 claims from the preceding week’s total of 245,000, according to numbers released last week by the Employment and Training Administration.

Initial jobless claims serve as a good indicator of layoff activity. Last week’s report was comfortably below market expectations of 244,000 claims for the week.

The four-week moving average — regarded as a more reliable measure of initial jobless claims — notched down to 241,750 claims, a drop of 2,500 claims from the prior week’s average of 244,250. This was the 126th week in which initial claims were below the 300,000-claim level, which economists consider is an indicator of a growing job market.

This week, we can expect:

  • Monday — Consumer credit for June from the Federal Reserve.
  • Wednesday — Wholesale inventories for June from the Census Bureau; second quarter labor productivity and costs from the Bureau of Labor Statistics.
  • Thursday — Initial jobless claims for last week from the Employment and Training Administration; producer price index for July from the Bureau of Economic Analysis; Federal budget for July from the Treasury Department.
  • Friday — Consumer price index for July from the Bureau of Economic Analysis.

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