Construction Labor Market Softens

2025-09-30T10:20:27-05:00

The count of open, unfilled positions in the construction industry decreased in August, per the Bureau of Labor Statistics Job Openings and Labor Turnover Survey (JOLTS). The decline occurred as home building weakened in 2025. The number of open jobs for the overall economy was effectively unchanged, increasing from 7.21 million in July to 7.23 million in August. The August reading was notably lower than the 7.65 million estimate from a year ago and reflects an overall cooling of the U.S employment market. Previous NAHB analysis indicated that this number had to fall below 8 million on a sustained basis for the Federal Reserve to move forward on interest rate reductions. With estimates remaining below 8 million for national job openings, the Fed, in theory, should be able to cut further in 2025. The number of open construction sector jobs decreased from a revised 303,000 level in July to 188,000 in August. This marks a notable decline of open, unfilled construction jobs from that registered a year ago (304,000). The chart below notes the declining trend that has been in place for unfilled construction jobs since the Fed raised the federal funds rate as home building weakened. The construction job openings rate declined to 2.2% in August, lower than the 3.6% estimated a year ago. The layoff rate in construction declined to 2.2% in August. The quits rate edged higher to 1.8% in August. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Construction Labor Market Softens2025-09-30T10:20:27-05:00

Beyond the Official Unemployment Rate: A Deep Dive into U.S. Unemployment

2025-09-23T09:17:38-05:00

In August, the official, or standardly referenced, unemployment rate rose slightly to 4.3%, up from 4.2% in July. This marks the highest level in nearly four years, though it remains historically low. Although the national unemployment rate provides a broader view of labor market conditions, it often obscures significant variations at the local level. In July 20251, unemployment rates across 387 metropolitan areas varied widely, ranging from a low of 1.8% to a high of 18.9%. Rapid City, South Dakota, and Sioux Falls, straddling South Dakota and Minnesota, reported the lowest unemployment rates in the nation at 1.8%, followed by Bozeman, Montana, at 2.2%. On the higher end, El Centro, California, posted the nation’s highest unemployment rate at 18.9%. Out of all U.S. metro areas, 139 (marked in red) had unemployment rates above the national average of 4.2%, while 229 metro areas (in blue) were below the national rate. The remaining 19 metro areas (in yellow) matched the national average. Among the metro areas with a higher-than-national average unemployment rate, 36% were in the West, 26% in the South, 24% in the Midwest, and 14% in the Northeast. This local analysis indicates a notable regional disparity in labor market conditions. In the following analysis, we will take a closer look at long-term unemployment and the broader U-6 unemployment rate, both of which provide further insight into the overall health of the labor market. Long-term unemployment Long-term unemployment, defined by the Bureau of Labor Statistics (BLS), refers to individuals who are currently unemployed2 and whose unemployment has lasted for 27 continuous weeks or more. This group represents a critical measure of labor market health and recent data shows an increasing trend. As of August 2025, more than 1.9 million Americans have been unemployed for at least 27 weeks. This marks the highest level since the COVID-19 pandemic and is almost double the number seen in early 2023. Today, long-term unemployed individuals account for nearly 26% of the total unemployed people, underscoring signs of a cooling labor market. Generally, higher levels of education are associated with lower unemployment rates. However, recent trends show a significant rise in long-term unemployment among college-educated workers. A New York Times article reports that college graduates now make up over 30% of the long-term unemployed people. This shift reflects deeper structural changes in the labor market, where automation, technological disruption, and federal job cuts have reduced the demand for roles traditionally held by degree-holders. Long-term unemployment doesn’t just signify a prolonged job search—it often signals deeper detachment from the labor market. According to a research paper titled “Are the Long-Term Unemployed on the Margins of the Labor Market?”3, only 11% of individuals who are long-term unemployed in a given month managed to secure steady, full-time employment a year later. Even for those who do find work, the clock isn’t necessarily reset. Many experience recurrent joblessness, often cycling between short-term employment and periods of unemployment, which prevents long-term economic stability and career progression. The U-6 Unemployment Rate To fully understand the state of the labor market, it’s important to look beyond the official U-3 rate and consider broader measures like the U-6 unemployment rate4. The U-6 unemployment rate offers a more comprehensive view of unemployment than the official U-3 rate. In addition to the total number of unemployed, U-6 includes all people marginally attached to the labor force, and individuals working part-time for economic reasons (also known as involuntary part-time workers). It is expressed as a percentage of the civilian labor force plus the marginally attached. Mathematically, the U-3 and U-6 unemployment rates can be calculated using the following equations: Where MA refers to all people marginally attached to the labor force, and PT refers to individuals working part-time for economic reasons (also known as involuntary part-time workers). A larger gap between the U-3 and U-6 rates indicates higher underemployment and greater labor market slack that is not captured by the official U-3 rate. Historically, this gap has ranged from 2.9 to 8.1 percentage points, often widening significantly during periods of recession. In August 2025, the gap stood at 3.8 percentage points. While this is still relatively low, it has been gradually increasing over the past two years. This upward trend may indicate that more workers are facing part-time work due to economic constraints or are struggling to find adequate employment that matches their skills and availability. Conclusion Overall, the U.S. labor market is showing signs of cooling as economic and policy uncertainty rise. While the official unemployment rate (U-3) remains low by historical standards, recent data points to a gradual softening. The share of long-term unemployed individuals continues to rise, and job openings declined in July—signaling reduced hiring demand. As the pace of hiring slows and job seekers face longer and more difficult searches, understanding these deeper trends is increasingly critical. The Federal Reserve’s interest rate cuts at its September meeting, along with another 75 basis points of easing in the coming quarters, may help cushion the labor market and prevent further deterioration. Note: The Bureau of Labor Statistics (BLS) releases unemployment data for U.S. metropolitan areas approximately one month after the national-level figures for the same reference period. For example, the Metropolitan Area Employment and Unemployment data for August 2025 is scheduled for release on October 1, 2025, approximately one month after the national data was published. ↩︎Unemployed:In the Current Population Survey, people are classified as unemployed if they meet all of the following criteria:a. They were not employed during the survey reference week.b. They were available for work during the survey reference week, except for temporary illness.c. They made at least one specific, active effort to find a job during the 4-week period ending with the survey reference week (see active job search methods) or they were temporarily laid off and expecting to be recalled to their job.People waiting to start a new job must have actively looked for a job within the last 4 weeks in order to be classified as unemployed. Otherwise, they are classified as not in the labor force.For more information, please go to the BLS website: https://www.bls.gov/cps/definitions.htm#jobsearch ↩︎Alan B. Krueger, Judd Cramer, and David Cho of Princeton University, “Are the Long-Term Unemployed on the Margins of the Labor Market?” presented at the Spring 2014 Conference on the Brookings Papers on Economic Activity (BPEA). ↩︎Alternative measures of labor underutilization (U-1 through U-6):In addition to the official unemployment rate, the Bureau of Labor Statistics publishes a range of alternative measures of labor underutilization. Together, these are known as the U-1 through U-6 rates. All six rates, U-1 through U-6, are produced solely from data collected in the Current Population Survey.U-1 is limited to people unemployed for 15 weeks or longer and is expressed as a percentage of the civilian labor force.U-2 is limited to unemployed job losers, including people who completed temporary jobs, and is expressed as a percentage of the civilian labor force.U-3 is the official unemployment rate. It is the total number of unemployed people, expressed as a percentage of the civilian labor force.U-4 adds discouraged workers to the total number of unemployed people, and is expressed as a percentage of the civilian labor force plus discouraged workers. (Discouraged workers are a subset of people not in the labor force. They are not included in the official unemployment measure because they have not searched for work in the last 4 weeks.)U-5 adds all people who are marginally attached to the labor force (which includes discouraged workers) to the total number of unemployed people, and is expressed as a percentage of the civilian labor force plus those marginally attached to the labor force.U-6 is the broadest measure of labor underutilization. In addition to the total number of unemployed and all people marginally attached to the labor force, U-6 includes people at work part time for economic reasons (also called involuntary part-time workers) and is expressed as a percentage of the civilian labor force plus the marginally attached.For more information, please go to the BLS website: https://www.bls.gov/cps/definitions.htm#ur. ↩︎ Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Beyond the Official Unemployment Rate: A Deep Dive into U.S. Unemployment2025-09-23T09:17:38-05:00

State-Level Employment Situation: August 2025

2025-09-19T13:16:01-05:00

The latest government state employment report paints a mixed picture of the job market. While a few states saw modest employment gains, most areas showed little to no progress. The pace of hiring appears to be slowing, raising concerns about the strength of the recovery. Nonfarm payroll employment increased in 32 states in August compared to the previous month, while decreasing in 17 states and the District of Columbia. Montana reported no change. According to the Bureau of Labor Statistics, nationwide total nonfarm payroll employment increased by 22,000 in August, falling short of expectations and following significant downward revisions to the previous two months’ figures including job losses in June. So far in 2025, monthly job growth has averaged 75,000, a significant slowdown compared to the 168,000 monthly average gain for 2024. On a month-over-month basis, employment data was most favorable in Texas, which added 17,600 jobs. Pennsylvania came in second (+12,200), followed by Ohio (+9,900). Meanwhile, a total of 80,000 jobs were lost across 17 states and the District of Columbia, with New York reporting the steepest job losses at 16,100. In percentage terms, employment increased the highest in Utah at 0.5%, while the District of Columbia saw the largest decline at 0.7% between July and August. Year-over-year ending in August, 1.5 million jobs have been added to the labor market, which is a 0.9% increase compared to the August 2024 level. The range of job gains spanned from 100 jobs in New Hampshire to 195,600 jobs in Texas. Four states and the District of Columbia lost a total of 23,600 jobs in the past 12 months, with Kansas reporting the steepest job losses at 10,000. In percentage terms, the range of job growth spanned 0.1% in Illinois to 3.1% in South Carolina. The range of job losses in Iowa, Maine, Kansas, and the District of Columbia spanned 0.1%-1.2%. Construction Employment Across the nation, construction sector jobs data 1—which includes both residential and non-residential construction—showed that 19 states reported an increase in August compared to July, while 29 states lost construction sector jobs. The two remaining states and the District of Columbia reported no change on a month-over-month basis. Florida, with the highest increase, added 3,600 construction jobs, while Nevada, on the other end of the spectrum, lost 4,400 jobs. Overall, the construction industry lost a net 7,000 jobs in August compared to the previous month. In percentage terms, Mississippi reported the highest increase at 3.1% and Nevada reported the largest decline at 4.1%. Year-over-year, construction sector jobs in the U.S. increased by 58,000, which is a 0.7% increase compared to the August 2024 level. Texas added 18,500 jobs, which was the largest gain of any state, while California lost 16,900 construction sector jobs. In percentage terms, New Mexico had the highest annual growth rate in the construction sector at 13.3%. During this period, Nevada reported the largest decline of 6.4%. For this analysis, BLS combined employment totals for mining, logging, and construction are treated as construction employment for the District of Columbia, Delaware, and Hawaii. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

State-Level Employment Situation: August 20252025-09-19T13:16:01-05:00

Job Growth Slowed in August

2025-09-05T10:15:54-05:00

Job growth slowed sharply in August, and the unemployment rate rose to its highest level in nearly four years. The latest jobs report, along with downward revisions to previous months’ data, indicates a continued cooling in the U.S. labor market. This softening trend is likely to increase pressure on the Federal Reserve to consider an interest rate cut at its upcoming September meeting. In August, wage growth slowed. Year-over-year, wages grew at a 3.7% rate, down 0.2 percentage points from the previous month. Despite the deceleration, wage growth has been outpacing inflation for nearly two years, which typically occurs as productivity increases. National Employment According to the Employment Situation Summary reported by the Bureau of Labor Statistics (BLS), total nonfarm payroll employment showed little change in August, with a modest gain of 22,000 jobs. June’s job growth was revised down by 27,000, from an initial estimate of +14,000 to -13,000, making the first negative monthly job growth since January 2010. July’s job growth was revised up by 6,000, from 73,000 to 79,000. Combined, the revisions erased 21,000 jobs from previously reported figures. So far in 2025, monthly job growth has averaged 75,000, a significant slowdown compared to the 168,000 monthly average gain for 2024. The unemployment rate rose to 4.3% in August, its highest level in nearly four years. The August increase in the unemployment rate reflected the increase in the number of persons unemployed (+148,000) and the increase in the number of persons employed (+288,000). Meanwhile, the labor force participation rate—the proportion of the population either looking for a job or already holding a job—edged up by 0.1 percentage points to 62.3%. This remains below its pre-pandemic level of 63.3% recorded at the beginning of 2020. Among prime working-age individuals (aged 25 to 54), the participation rate rose by 0.3 percentage points to 83.7%, the highest level since October 2024. In August, employment continued to trend up in health care (+31,000) and in social assistance (+16,000), while employment in federal government, mining, wholesale trade, and manufacturing sectors experienced job losses. Federal government employment declined by 15,000 jobs in August and has now shed a total of 97,000 positions since peaking in January 2025. The BLS notes that “employees on paid leave or receiving ongoing severance pay are counted as employed in the establishment survey.” Construction Employment Employment in the overall construction sector declined by 7,000 in August, marking the third consecutive month of job losses in the industry. Downward revisions to June and July figures further underscore the sector’s ongoing weakness. Within the industry, residential construction lost 6,100 jobs, while non-residential construction employment declined by 1,200 jobs during the month. Residential construction employment now stands at 3.3 million in August, broken down as 954,000 builders and 2.4 million residential specialty trade contractors. The six-month moving average of job gains for residential construction was -4,783 a month, reflecting the five months of job losses recorded over the past six months, specifically in March, May, June, July, and August of 2025. Over the last 12 months, home builders and remodelers experienced a net loss of 26,100 jobs, marking the fourth annual decline since September 2020. Since the low point following the Great Recession, residential construction has gained 1,345,300 positions. In August, the unemployment rate for construction workers rose to 3.9% on a seasonally adjusted basis. The unemployment rate for construction workers has remained at a relatively lower level, after reaching 15.3% in April 2020 due to the housing demand impact of the COVID-19 pandemic. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Job Growth Slowed in August2025-09-05T10:15:54-05:00

Open Construction Jobs Rise in July

2025-09-03T12:15:52-05:00

The count of open, unfilled positions in the construction industry increased in July, per the June Bureau of Labor Statistics Job Openings and Labor Turnover Survey (JOLTS) as the national labor market cooled. The number of open jobs for the overall economy decreased from 7.36 million in June to 7.18 million in July. The July reading was notably lower than the 7.50 million estimate from a year ago and reflects an overall cooling of the U.S employment market. Previous NAHB analysis indicated that this number had to fall below 8 million on a sustained basis for the Federal Reserve to move forward on interest rate reductions. With estimates remaining below 8 million for national job openings, the Fed, in theory, should be able to cut further despite a recent pause. There is growing pressure on the Fed to do so. Running counter to the national trend, the number of open construction sector jobs increased from a revised 242,000 level in June to 306,000 in July. This marks an increase of open, unfilled construction jobs than that registered a year ago (229,000). The chart below notes the declining trend that has been in place since the Fed raises the federal funds rate but with the recent uptick for unfilled positions in construction. The construction job openings rate increased to 3.5% in July, higher than the 2.7% estimated a year ago. The layoff rate in construction increased to 2.8% in July, the highest rate since March 2023. The quits rate declined to 0.9% in July, the lowest recorded for the construction sector (data starts in 2000). The construction market appears to have experienced considerable churn in July, with job openings rising, quits very low, and layoffs increasing. Future data will allow for identifying trends. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Open Construction Jobs Rise in July2025-09-03T12:15:52-05:00

State-Level Employment Situation: July 2025

2025-08-20T09:17:14-05:00

Nonfarm payroll employment increased in 30 states and the District of Columbia in July compared to the previous month, while decreasing in 20 states. According to the Bureau of Labor Statistics, nationwide total nonfarm payroll employment increased by 73,000 in July, falling short of expectations and following significant downward revisions to the previous two months’ figures. On a month-over-month basis, employment data was most favorable in New York, which added 55,500 jobs. Missouri came in second (+17,100), followed by California (+15,000). Meanwhile, a total of 37,100 jobs were lost across 20 states, with Utah reporting the steepest job losses at 5,200. In percentage terms, employment increased the highest in Missouri at 0.6%, while Wyoming saw the largest decline at 0.5% between June and July. Year-over-year ending in July, 1.5 million jobs have been added to the labor market, which is a 1.0% increase compared to the July 2024 level. The range of job gains spanned from 400 jobs in Montana to 232,500 jobs in Texas. Two states and the District of Columbia lost a total of 8,900 jobs in the past 12 months, with the District of Columbia reporting the steepest job losses at 4,200. In percentage terms, the range of job growth spanned 0.1% in Montana to 3.4% in South Carolina. The range of job losses in Maine, Iowa, and the District of Columbia spanned 0.2%-0.5%. Construction Employment Across the nation, construction sector jobs data 1—which includes both residential and non-residential construction—showed that 22 states reported an increase in July compared to June, while 22 states lost construction sector jobs. The six remaining states and the District of Columbia reported no change on a month-over-month basis. Colorado, with the highest increase, added 3,800 construction jobs, while California, on the other end of the spectrum, lost 3,300 jobs. Overall, the construction industry added a net 2,000 jobs in July compared to the previous month. In percentage terms, Oregon reported the highest increase at 2.6% and Wyoming reported the largest decline at 3.4%. Year-over-year, construction sector jobs in the U.S. increased by 96,000, which is a 1.2% increase compared to the July 2024 level. Texas added 27,000 jobs, which was the largest gain of any state, while California lost 18,200 construction sector jobs. In percentage terms, New Mexico had the highest annual growth rate in the construction sector at 14.3%. During this period, New Jersey reported the largest decline of 4.9%. For this analysis, BLS combined employment totals for mining, logging, and construction are treated as construction employment for the District of Columbia, Delaware, and Hawaii. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

State-Level Employment Situation: July 20252025-08-20T09:17:14-05:00

Residential Building Worker Wage Growth Slows Amid Housing Slowdown 

2025-08-18T10:15:16-05:00

Both real and nominal wage growth for residential building workers slowed during the second quarter of 2025, reflecting a broader cooling in the construction labor market, according to the latest report from the U.S. Bureau of Labor Statistics (BLS). In nominal terms, average hourly earnings (AHE) for residential building workers rose to $39.35 in June 2025, a 3.5% increase from $38.02 a year ago. This marks a continued deceleration in the year-over-year wage growth, which peaked at 9.3% in June 2024. The recent slowdown reflects a slowdown in residential construction activity and a decline in labor demand across the sector. Meanwhile, the number of open, and unfilled construction sector jobs has continued to trend downward, in line with the overall slowdown in housing activity. Despite the slowdown in wage growth, residential building workers’ wages remain competitive: 11.4% higher than the manufacturing sector ($35.32/hour) 25.3% higher than the transportation and warehousing sector ($31.4/hour) 2.3% lower than the mining and logging sector ($40.29/hour) Note: Data used in this post relate to all employees in the residential building industry. This group includes both new single-family housing construction (excluding for-sale builders) and residential remodelers but does not include specialty trade contractors. Discover more from Eye On Housing Subscribe to get the latest posts sent to your email.

Residential Building Worker Wage Growth Slows Amid Housing Slowdown 2025-08-18T10:15:16-05:00
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