US labour market on solid footing; rising mortgages pressuring housing sector
The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, though the decline was likely exaggerated by the Labor Day holiday, with the underlying trend pointing ...
The US labour market appears to be in good health despite recent increases in mortgage rates affecting the housing sector. Unemployment claims fell unexpectedly last week to 196,000, the lowest level since mid-July, though this decline may have been influenced by the Labor Day holiday. The underlying trend suggests the labour market remains stable.
Fed Chairman Kevin Warsh highlighted the labour market as a sign of strength, stating the unemployment rate is consistent with full employment. The federal funds rate was increased by 25 basis points to the 3.75%-4.00% range, with the central bank expected to maintain focus on fighting inflation stemming from the Middle East conflict.
The four-week average of initial claims remained steady, indicating consistent labour market conditions. Nonfarm payrolls increased by 162,000 jobs in August, after slowing growth in preceding months. However, the rising mortgage rates due to inflation are putting pressure on the housing market. Building permits for single-family homes dropped 1.8% in August to 878,000 units, while homebuilder sentiment reached a one-year low.
Multi-family homebuilding experienced a more significant decline of 22.5%, dropping to 344,000 units. Overall housing starts declined 2.6% year-over-year. Despite this, the unemployment rate remains low at 4.1%, supported by low layoffs and a smaller labour force, largely due to slow population growth, retirements, and tighter immigration policies.
Written by urgent.news from Gulf Times Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
