Taking the Good With the Bad: Unemployment and New Home Sales at Record Lows
The United States economy and labor market continue their comeback, with the summer’s numbers better than expected.
According to July’s report from the Bureau of Labor Statistics, May and July’s unemployment rates (4.3 percent) were the lowest since 2001 and 209,000 jobs were added in July alone, about 15 percent more than predicted. Thanks to businesses that have been able to hire, July yielded a milestone of 153.5 million employed Americans. In regards to industries, leisure and hospitality hired 62,000 and the health care industry hired 39,000.
The report also shows that income has been increasing for low-paying jobs and that the underemployment rate is steady. However, it’s important to point out that although almost 400,000 part-time jobs were added, 54,000 full-time jobs were cut. Some economists say that July’s data reveals that the overall trend of wage increases is losing steam and decelerating.
If your business added jobs or raised wages this year, we applaud you for helping America’s recovery by investing in your workers.
The Housing Market
In July, new home sales surprisingly hit a record low, falling 9.4 percent from June, the lowest rate in the past seven months. Experts say this decline is caused from a shortage of homes, which in turn surged median new house prices (they’re more than 6 percent higher now compared to a year ago, while annual income growth is only around 2.5 percent).
New American homes are on the market for higher prices than ever before. Unfortunately, even when these new homes are compared to existing homes with analogous features, the new houses are still much more expensive. So, it isn’t surprising that people aren’t lining up to buy new homes. Instead, more people are renting or remodeling their existing homes in lieu of buying a new house.
Have you added new employees to your payroll this year or increase your employees’ salaries? Thinking about buying a new house? Contact Paragon today to discuss the tax implications.