Nonbank mortgage employment declined for the fourth month in a row in August, although preliminary data from the Bureau of Labor Statistics showed an increase in loan broker employment compared with July.
Total industry employment declined to 401,200 in August from a revised 404,400
The overall decline in mortgage employment is not a surprise as the industry
The mortgage industry data lags the total employment figures by one month. For September, total nonfarm payroll employment increased by 263,000 compared with August, and the unemployment rate edged down to 3.5%, BLS said.
Hurricane Ian had no effect on the collection of data, the agency said, as the household survey data collection was completed before the storm made landfall in Florida, and establishment survey data collection rates were within normal ranges nationally and for the affected areas.
"Overall, the September jobs report reflects a still-strong labor market that is gradually cooling," said Odeta Kushi, deputy chief economist at First American Financial, in a statement. "The Federal Reserve really wants to see the labor supply increase, and the September jobs report did not deliver."
September's job growth was below the average 420,000 per month in 2022. "This is still faster than can be sustained in the U.S. economy over time," Mike Fratantoni, chief economist at the Mortgage Bankers Association, said in a statement. "And other data clearly signaling a slowing economy lead us to forecast a sharp drop in job growth over the coming months."
Fratantoni predicts the Federal Open Market Committee will raise short-term rates again in November, but by just 50 basis points this time. But it could go higher if inflation fails to slow.
"So far, the jobs market is taking interest rate rises in its stride but, on one level, that indicates it remains one of the input factors keeping price rises from slowing," said James Bentley, director of Financial Markets Online, in a commentary.
This is one of the data points used by policymakers to measure if they are tightening too fast.
"However, it would be a mistake to assume they don't expect there to be some kind of negative impact on the employment picture at some point," Bentley said. "We're past that. They are deliberately trying to cool the economy and the Fed probably has a higher pain threshold to remain on course with rate rises than investors expect, so you'll continue to see swings at the merest suggestion the pace of tightening could slow."
Kushi noted residential building construction employment decreased a modest 0.1% from the previous month.
"While the construction industry has faced a labor shortage for many years, the slowdown in the housing market and homebuilding, particularly for single-family homes, will likely put downward pressure on job gains in months to come," Kushi said.
