U.S. Sees Stable Unemployment Rates, Stronger Homebuilder Sentiment

The Bureau of Labor Statistics reported stable regional and state unemployment rates in July that indicated a growing divergence between states and counties. The unemployment rate remained at 6.2% across states, down 110 basis points from a year ago.

The Bureau of Labor Statistics reported stable regional and state unemployment rates in July that indicated a growing divergence between states and counties. The unemployment rate remained at 6.2% across states, down 110 basis points from a year ago.

Nonfarm payroll employment grew in 36 states and Washington D.C. and fell in 13 states; in Iowa, the employment rate was unchanged. Texas saw the largest increase in payrolls, with 46,600 new jobs added, followed by California, with 27,700 new jobs, and Michigan, with 17,900. Texas has an unemployment rate of 5.1%, one of the lowest in the nation, while California’s unemployment rate was at 7.4% in July. While higher than the national average, it fell 1.6% from a year ago. Michigan’s unemployment rate also fell 1.3% to 7.7% in July 2014 from a year ago.

Southern Growth, Northern Strength

Several southern and southwestern states saw robust job growth and a declining jobless rate; South Carolina and Nevada saw unemployment rates fall by 2% or more. Over the past year, job growth has risen the most in southern states too, with Florida gaining 208,500 jobs in the year, and Texas gaining 396,200.

Despite their job gains, jobless rates remain lower in many states to the north, with New Hampshire, Vermont, and Utah holding some of the lowest unemployment rates in the nation. North Dakota’s unemployment rate of 2.6% is likely to remain low thanks to a 4.4% gain in jobs over the past year, stronger than any state in the nation and followed by Nevada and Utah. Meanwhile, Mississippi has the highest unemployment rate at 8%.

Many analysts have noted that the economic recovery has been nationally uneven, but that state-level trends were likely to become increasingly divergent thanks to a restrictive fiscal policy and separate regional growth drivers.

Homebuilders Optimistic on Greater Demand

As jobs continue to gain and new home starts continue to gain, the National Association of Home Builders reports that homebuilders are increasingly bullish on the housing market. The NAHB index for homebuilder confidence, the HMI, rose two points in August thanks to more anticipated demand for new houses throughout the nation.

[QUOTE] “Each of the three components of the HMI registered consecutive gains for the past three months, which is a positive sign that builder confidence appears to be firming following an uneven spring,” [/QUOTE] said NAHB Chief Economist David Crowe.

In addition to job growth, the NAHB’s survey respondents cited falling mortgage rates, which are nearing low levels seen a year ago, as a driver of home buying activity in many regions. [QUOTE] “Factors contributing to this rise include sustained job growth, historically low mortgage rates and affordable home prices, which are helping to unleash pent-up demand,” [/QUOTE] said Crowe.

However, the NAHB said regional confidence was weaker in regions with stronger job growth, as the NAHB was up one point in the south, up two points in the northeast, and up seven points in the midwest.