NEW YORK (AP) â¿¿ Shares of home builders tumbled Friday, along with the broader market, after the Labor Department said that U.S. employers created just 69,000 jobs in May, the fewest in a year, while the unemployment rate ticked up.
The government also said Friday that the economy created far fewer jobs in the previous two months than first thought. It revised those figures down to show 49,000 fewer jobs created. The unemployment rate rose to 8.2 percent from 8.1 percent in April, the first increase in 11 months.
Shares of home builders fell about 5 percent, marking the third straight day of losses.
Job creation is the fuel for the nation's economic growth. When more people have jobs, more consumers have money to spend â¿¿ and consumer spending drives much of the economy.
The housing industry, especially new home construction, is particularly sensitive to fluctuations in employment and job creation. People who are out of work, or are worried that they soon could be jobless, are less likely to risk investing in a new home. Being unemployed makes it difficult to get a mortgage.
The jobs news overshadowed Commerce Department data, also released Friday, that showed that builders increased spending on construction projects for a second month in April.
Residential construction and new home sales also increased, which could be seen as signs that housing demand has stabilized after years of weakness.
D.R. Horton Inc. posted one of the sector's biggest declines, falling $1.54, or 9.3 percent, to $15.06 in midday trading. Lennar Corp. dropped $2.22, or 8.1 percent, to $25.07.
Ryland Group fell $1.61, or 7.2 percent, to $20.75. Beazer Homes USA Inc. lost 18 cents, or 6.9 percent, to $2.43. Hovnanian Enterprises Inc. fell 11 cents, or 5.9 percent, to $1.76, and KB Home fell 41 cents, or 5.6 percent, to $6.85.