Jobs Data and Home Price Forecasts Signal Strength - MBS Highway Weekly Update 6-8-26
Week of June 1, 2026 in Review Labor market data paints a resilient picture, while home price forecasts highlight the long-term opportunity in homeownership. Here are the key takeaways.
Jobs Report Surprises to the Upside
The latest Bureau of Labor Statistics (BLS) report showed stronger-than-expected job growth in May. The economy added172,000 jobs, compared with forecasts of about 85,000. Job gains for March and April were also revised higher by a combined93,000 jobs. The unemployment rate held steady at 4.3%.
What’s the bottom line?
The three-month average of job growth now stands at 188,000, a stronger pace than recent months anda positive sign for the labor market.
However, some underlying details were softer. Full-time employment fell by 79,000 jobs, while part-time employment increasedby 266,000. In addition, long-term unemployment – those out of work for 27 weeks or more – rose to its highest level since 2021,suggesting that while hiring remains steady, it may be taking longer for some workers to find new roles.
ADP Report Signals Broader Hiring Gains
Private payroll data from ADP offered a similar signal to the government jobs report. Employers added 122,000 jobs in May, just above forecasts. Hiring was spread across businesses of all sizes, with small businesses leading the gains. Eight of ten major sectors posted job growth.
What’s the bottom line?
ADP Chief Economist Dr. Nela Richardson said hiring was "more broad-based in May than we've seen in the last few years," suggesting the labor market continues to show resilience heading into the summer hiring season.
Recent trends also point to improving momentum. Job growth has averaged 96,000 per month over the last three months, up from 67,000 over the last six months. However, much of the growth continues to come from Education and Health Services, sectors that tend to be less sensitive to economic conditions and more influenced by long-term demographic trends.
On wages, workers who changed jobs saw pay increase by 6.5% over the past year, compared with 4.4% for those who stayed with their employer. While job switchers still enjoy a pay premium, the gap has narrowed, suggesting the labor market is becoming less competitive than it was in recent years.
Additional Labor Data Supports a Resilient Outlook
Broader labor market indicators released last week help round out the picture.
Revelio Labs reported 123,700 job gains in May, nearly double April's total and the strongest monthly increase since last July.
Job openings also came in stronger than expected, rising from 6.9 million in March to 7.6 million in April. Keep in mind that the true number of openings may be somewhat lower, as some remote jobs are posted in multiple locations.
New unemployment claims remain relatively low at around 225,000. However, that figure may not capture all labor market stress,as some displaced workers are choosing gig or freelance work rather than filing for unemployment benefits.
At the same time, continuing unemployment claims remained elevated at 1.78 million, indicating that many job seekers are taking longer to find new employment.
Separately, Challenger, Gray & Christmas reported approximately 97,000 job cuts in May, up from about 83,000 in April. AI-related restructuring was cited as the leading cause of layoffs for the third consecutive month. On a positive note, announced hiring plans nearly doubled from April to roughly 19,500
What’s the bottom line?
While some indicators continue to point to softness in the labor market, recent data suggests conditions are stabilizing and showing resilience after several months of slower job growth.
Homeownership's Long-Term Value on Display
Home prices rose 0.4% from March to April and were also 0.3% higher than a year ago, according to Cotality's latest Home Price Insights report.
What’s the bottom line?
While recent price gains have been modest, Cotality expects appreciation to pick up over the next year. The firm now forecasts home prices will rise 5.3% over the next 12 months, up from its previous projection of 5.1%.
For buyers and homeowners, it's a reminder of real estate's long-term wealth-building potential. A home valued at $500,000 that appreciates 5% would gain roughly $25,000 in value over the course of a year, illustrating how steady appreciation can add up over time.
What to Look for This Week
Existing Home Sales data is due on Tuesday, followed by two closely watched inflation reports: the Consumer Price Index (CPI)on Wednesday and the Producer Price Index (PPI) on Thursday. We'll also get the latest weekly jobless claims on Thursday, providing another snapshot of the labor market.
All data and analysis provided by MBS Highway.
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Mike Nelson, CEO - Efficient Lending, Inc 720.419.3016 | mike@efficientlending.net |
