A slower economy, a slightly better housing mood.

Jobs And Wages

The labor market is still moving, but it is no longer sprinting.

U.S. nonfarm payrolls increased by 57,000 jobs in June, the slowest monthly gain in four months. April and May were revised down to 148,000 and 129,000 jobs, respectively.

For the first six months of the year, the economy still added an average of 92,000 jobs per month. So the labor market is not falling apart, but it is no longer sprinting either.

The unemployment rate declined to 4.2%, though the drop was helped by people leaving the workforce. That is a bit like losing weight because you misplaced the scale. Technically true, but not quite the victory lap one might hope for.

Wages also remain under pressure. Average hourly earnings rose 3.5% year-over-year, while inflation was running at 4.2%. When prices rise faster than paychecks, consumers tend to become more careful. Housing is rarely helped by careful wallets.

Consumer Mood

Buyers may be re-engaging before they are enthusiastic.

Consumer confidence improved slightly in June. The U.S. Consumer Confidence Index rose to 91.2, up from 90.6 in May.

That is not a dramatic rebound, but the direction matters. More importantly for housing, homebuying expectations improved on a six-month rolling basis, even though 61.5% of consumers expect interest rates to rise over the next six months.

That tells us something useful: buyers may not love the market, but some are beginning to re-engage with it. In real estate, demand often returns before enthusiasm does.