TheMReport

44 | TH E M R EP O RT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA Lacking in Lumber Builder reports of lumber shortages are on the rise. S o far, material shortages haven't been an issue in the single-family housing industry, but a report from the National Associ - ation of Home Builders (NAHB) says that's starting to change. In May 2017's survey for the NAHB/Wells Fargo Housing Market Index, 21 percent of single-family builders said there was a shortage in framing lumber. Though it isn't quite as bad as the current lot and labor shortage, it could be well on its way. Since 2014, no product or material was named in short supply by more than 15 percent of builders. For most building materials, that is still the case. Cement and cabinets were also reported as being in short supply by 13 percent of builders, while trusses and ready-mix concrete were named in short supply by 14 percent, According to NAHB, nearly all of these materials and products have been relatively stable, only moving a few percentage points in the last three years. The only exception? Again, framing lumber. The supply of lumber in 2013 looked as though it was begin - ning to become a problem. However, it subsided when only 8 percent of builders in July 2014 said it was in short supply. In July 2015, the story was very much the same, with just 7 per - cent saying supply was short. In the last two years, it's more than doubled—a post-recession high. The last time NAHB re - ported numbers this high, it was October 2004, a time when the annual rate of housing starts was right around 2 million—almost 1 million more than today's rate of 1.1 million. Softwood lumber has in - creased in price consistently with the shortage. NAHB said it is virtually certain that the underlying factor for this is the ongoing lumber trade dispute between the U.S. and Canada. Job Growth Up; Wages Can't Keep Up Despite an uptick in jobs as of late, wages across the nation have stalled. O ne day after announc- ing that unemploy- ment claims rose for the third straight week, the Labor Department proclaimed job growth surged past its June expectations. The latest figures from the Bureau of Labor Statistics showed that nonfarm payroll jobs reached 222,000 last month—well past the expected gain of 180,000. The Labor Department cred - ited increased worker hours for the surge. The average work- week increased from 34.4 to 34.5 hours per week from May to June. Employment increased in health care (up 37,000 jobs), social assistance (up 23,000), fi - nancial activities (up 17,000), and mining (up 8,000). Employment in other major industries, including construction, manufacturing, wholesale trade, retail trade, transportation and warehousing, information, and government, however, showed little change over the month. According to Curt Long, Chief Economist at the National Association of Federally-Insured Credit Unions (NAFCU), while the growth in jobs is great news, "wage growth has stalled, which will add to fears that low inflation may not improve anytime soon." Average hourly earnings increased four cents in June to $26.25—an uptick of just 0.2 percent. That's better than the 0.1 percent gain in May, though not by much. Year over year, the aver - age hourly wage was up 2.5 percent in June, or 63 cents an hour. That compares to an uptick of 2.4 percent in May. In June, average hourly earn - ings of private-sector production and nonsupervisory employees increased by 4 cents to $22.03. The latest numbers showed divisions among Fed officials over how great a concern sluggish wage growth actually is, Long said. "While we may see the Fed trimming its balance sheet later this year, another rate hike is looking less likely," he said. Also causing some consterna - tion among economists is the unusually low unemployment pic- ture. In May, unemployment hit a 16-year low at 4.3 percent. In June, that number crept upwards to 4.4 percent. While that could signal greater confidence in the labor market, it could also be an artifi - cial optimism in that more people are simply looking for work. The number of long-term unemployed (those jobless for 27 weeks or more) was unchanged at 1.7 million in June. Long-term unemployed accounted for 24.3 percent of all unemployed. Over the year, the number of long-term unemployed was down by 322,000. "Wage growth has stalled, which will add to fears that low inflation may not improve anytime soon." —Curt Long, Chief Economist, NAFCU

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