The following is MBA SVP and Chief Economist Mike Fratantoni’s reaction to this morning’s U.S. Bureau of Labor Statistics report on employment conditions in November.

“Job growth slowed, and the unemployment rate was unchanged in November. Despite this better-than-expected report, MBA is holding to its forecast of a recession in the U.S. in the first half of 2023. While the payroll survey showed a slower pace of growth, the household survey again showed an outright decline in employment – with a drop of 138,000 in November. With other data showing declines in job openings and increases in announced layoffs, we do expect further weakening ahead, with the unemployment rate likely to reach 5.5 percent by the end of 2023.

“Although wage growth picked up last month, it remains below the pace of inflation, meaning that households will increasingly have a difficult time managing these higher costs.

“A weakening job market will eventually be a negative for the housing market, as it will reduce demand. However, reaching the Federal Reserve’s goal of reducing inflation will be a benefit to those still in a position to buy a home, as it will bring down mortgage rates and improve affordability.”