Published April 11, 2019
Independent of the ongoing debate about whether the Fed overreached on the pace of their interest rate increases, this morning’s March employment numbers are a great bump heading into the spring. The addition of 196,000 jobs is a welcome sign that the initial mediocre February payroll numbers of only 20,000 new jobs was an outlier from the overall trend.
The February dip was likely some combination of headwinds from a cold winter, the government shutdown, and expectations of slowing overall growth because of more expensive credit conditions.
The encouraging uptick in job growth released this morning bodes well for continuing the trend of not only a larger market for home services in absolute terms, but also a larger market in proportional terms as ongoing labor market competition continues to increase wages across the income spectrum, boosting both home ownership rates and discretionary incomes. This boost in incomes should lead directly to more spending on home-based projects.
What Does This Mean for the Labor Shortage & Home Services Markets?
Despite the encouraging uptick in job growth, there is still a consistent challenge regarding employment in the home services and construction labor markets as the current working generation ages and we face shortages of skilled workers. The latest numbers highlight the need to address the skills gap: we have historically low unemployment rates for the skilled labor market, but 1.3 million Americans have been unemployed for 27+ weeks; bridging this gap will simultaneously provide new opportunities to those 1.3 million, while also ensuring economic sectors like the home services industry continue to grow and flourish.
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