Nonbank mortgage employment plunges after hurricanes

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Nonbank mortgage employment declined in September, the largest drop since January, according to the Bureau of Labor Statistics.

Hiring during September in all industries was affected by Hurricanes Harvey and Irma, the BLS said in last month's release. Still it is the second time since July that nonbank mortgage employment was down from the previous month.

There were 342,100 people employed by independent mortgage bankers and mortgage brokers during September, down from a revised 343,700 during August. Nonbank mortgage employment fell by a similar amount in January from December. The industry has added 17,500 jobs since September 2016.

Total nonfarm employment increased by 261,000 in October, while September's data was revised to a gain of 18,000 jobs from a loss of 33,000. Industry-specific employment data lags national data by one month.

The October report was "underwhelming," Fannie Mae Chief Economist Doug Duncan said in a press release. "The much-anticipated rebound in October nonfarm payrolls was less than market expectations, and even with the 90,000 upward revisions in the hurricane-affected months, the average monthly job gain for the last three months came in at 162,000 — a slowdown from the year-to-date monthly average gain through July of 171,000."

The unemployment rate edged down by 0.1 percentage point to 4.1% in October, and the number of unemployed decreased by 281,000 to 6.5 million, the BLS report said.

"The bottom line is that slack in the labor market is receding but the hiring trend is slowing and wage gains remain muted. Despite the mixed bag of news in today's report, we still expect the Fed to move forward with its last interest rate hike of the year in December," Duncan said.

The Federal Open Market Committee did not raise short-term rates following its most recent meeting on Nov. 1.

Residential construction jobs increased 7.2% to 767,000 for October from September. But this is only a 2.3% year-over-year increase, pointed out First American Financial Corp. Chief Economist Mark Fleming in a press release.

"Homebuilding, particularly housing starts, faces a number of headwinds at the moment, including access to buildable lots with the appropriate infrastructure, rising regulatory costs, increased building material costs and labor constraints," he said.

Builders want to hire more people but can't find them to fill the openings. "Housing starts continue to face a labor shortage challenge and the gap between household formation and homebuilding will remain," Fleming said.

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Employment data Nonbank Mortgage brokers Hurricane Harvey Hurricane Irma Bureau of Labor Statistics Fannie Mae First American Financial Corp. FOMC