Nonbank mortgage lenders cut 6,000 jobs in January, erasing four months of job growth in the sector, the Bureau of Labor Statistics said Friday.
Employment and nonbank lenders and mortgage brokers fell to 282,200 in January, according to preliminary BLS estimates, down from an employment level of 288,100 in December. Last year, industry employment hovered near 281,000 in June and July before reaching a 12-month high in December. The bureau's industry-specific estimates lag by one month and last month, the BLS revised all of its 2014 employment estimates for nonbank mortgage lenders.
Separately, total nonfarm employment grew by 295,000 jobs during February, the BLS also reported Friday. It was a higher than expected increase that lowered the overall unemployment rate to 5.5%, the lowest since the recession. However the workforce participation rate of 62.8% remains near its lowest point since 2008.
Food and drink services drove that encouraging news, hiring 59,000 employees in February, while professional and business services contributed the second most jobs at 51,000. Perhaps the most encouraging statistic for the mortgage industry was that the construction sector added 29,000 jobs. However, wage growth remains weak, according to the Bureau. The most recent BLS real earnings report, for January, showed a 0.7% decrease in the urban consumer price index.
"We're seeing some disconnect between the strong labor market and lackluster housing activity in early 2015," Fannie Mae chief economist Doug Duncan said in a statement about the overall employment figures.
Fannie Mae research due out next week will show an overall improvement in consumer sentiment towards the economy at large, but smaller gains in consumer confidence regarding the housing market, Duncan added.
"We maintain our belief that once upbeat hiring translates into stronger income growth, which we believe it likely will, a stronger housing recovery will follow," he said.