September Hiring Slows to 29,000 as Housing Construction Shows a Split Picture

Why This Matters

September’s weak hiring total points to slower labor demand, but construction employment was not uniformly weak. The split matters for homebuyers and mortgage professionals because labor-market softness can cool housing demand while uneven construction hiring can still shape the pace and cost of adding homes.

Cover: Bureau of Labor Statistics offices at the Postal Square Building in Washington, photographed by Ray Flores for the U.S. Department of Labor on May 19, 2017. U.S. government work, generally public domain. View the original and rights statement.

September hiring slowed sharply

U.S. employers added 29,000 jobs in September, according to the Bureau of Labor Statistics. The unemployment rate was 4.2%, and average hourly earnings increased 0.1% from August and 3.0% from a year earlier.

The prior two months also looked weaker after revisions. July payrolls were revised from a gain of 21,000 to a loss of 10,000. August was revised from 162,000 to 133,000. Together, the revisions removed 60,000 jobs from the earlier estimates.

Key Numbers

• 29,000: total payroll gain
• 4.2%: unemployment rate
• 11,000: construction jobs added
• -7,900: residential specialty trade jobs
• -60,000: combined July and August revisions

Construction’s headline gain hides a divide

Construction employment increased by 11,000 overall, but the details moved in different directions. Nonresidential specialty trade contractors added 12,000 jobs. Residential specialty trade contractors lost 7,900. Residential building construction added 3,000.

That mix does not show a uniform building slowdown or boom. It suggests that commercial and infrastructure-related trade hiring was stronger than the residential specialty segment during the month. BLS said employment in all major industries changed little overall, so one monthly category should not be treated as a trend by itself.

For housing, the distinction matters. Residential builders depend on specialized trades for work such as plumbing, electrical systems, roofing and finishing. A monthly decline in those jobs can signal caution, project timing changes or normal volatility. The gain in residential building construction points the other way. Future reports will be needed to show whether either move persists.

What the report means for housing demand

Slower job growth can reduce household confidence and limit the number of people ready to buy a home. It can also ease some wage and inflation pressure over time. September’s 0.1% monthly earnings gain was modest, but wages were still 3.0% higher than a year earlier.

The report arrived after a difficult week in global bond markets. Treasury yields moved lower after the 8:30 a.m. release, although the timing does not prove the jobs report was the only cause. MarketWatch showed the 10-year Treasury yield at 5.198% at 10:02 a.m. Eastern, down 4.4 basis points from its displayed 5.242% prior close. A fresh Yahoo Finance chart observation showed 5.195% at 10:23 a.m. Eastern.

Mortgage rates do not move one-for-one with the 10-year yield. Mortgage-backed securities, lender capacity, loan characteristics, servicing value and margins also affect consumer pricing. One morning’s bond rally also does not erase the inflation and global bond risks that pushed yields higher earlier in the week.

Practical takeaway

Homebuyers should read the report as evidence of a softer labor market with a mixed construction picture, not as a promise of lower mortgage rates or cheaper new homes. Loan officers and builders can watch whether residential specialty trade employment continues to weaken alongside future permits, starts and payroll data. The next employment report is scheduled for November 6.