Labor Market Softens in October

2022-11-04T11:18:49-05:00

Job growth slowed in October as the Fed continues its tightening of financial conditions to fight inflation, but the overall labor market remains tight. The unemployment rate increased by 0.2 percentage points to 3.7% in October as the number of persons in the labor force decreased for the second straight month. Total nonfarm payroll employment increased by 261,000 in October, following a gain of 315,000 in September, as reported in the Employment Situation Summary. It marks the smallest monthly job gain in nearly two years. The estimate for August was revised down by 23,000, from +315,000 to +292,000, while the September increase was revised up by 52,000, from +263,000 to +315,000. In the first ten months of 2022, nearly 4.1 million jobs were created, and monthly employment growth averaged 407,000 per month. The unemployment rate ticked up by 0.2 percentage points to 3.7% in October. The number of unemployed persons increased by 306,000 to 6.1 million, while the number of employed persons decreased by 328,000. Meanwhile, the labor force participation rate, the proportion of the population either looking for a job or already with a job, edged down 0.1 percentage point to 62.2% in October, reflecting the increase in the number of persons not in the labor force and the decrease in the number of persons in the labor force. Moreover, the labor force participation rate for people aged between 25 and 54 decreased to 82.5%. Both of these two rates are still below their pre-pandemic levels in the beginning of 2020, and are not fully recovered from the COVID-19 pandemic. For industry sectors, health care (+53,000), professional and technical services (+43,000), and manufacturing (+32,000) led job gains in October. Employment in the overall construction sector was little changed (+1,000) in October, following a 22,000 gain in September. Residential construction gained 900 jobs, while non-residential construction employment gained 300 jobs in October. Residential construction employment currently exceeds its level in February 2020, while 83% of non-residential construction jobs lost in March and April have now been recovered. Residential construction employment now stands at 3.2 million in October, broken down as 904,000 builders and 2.3 million residential specialty trade contractors. The 6-month moving average of job gains for residential construction was 6,217 a month. Over the last 12 months, home builders and remodelers added 105,300 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 1,195,000 positions. In October, the unemployment rate for construction workers rose by 1.0 percentage points to 5.5% on a seasonally adjusted basis. The unemployment rate for construction workers has been trending lower, after reaching 14.2% in April 2020, due to the housing demand impact of the COVID-19 pandemic. Related ‹ Share of Young Adults Living with Parents Declined in 2021Tags: employment, labor force, labor force participation rate, residential construction employment

Labor Market Softens in October2022-11-04T11:18:49-05:00

Construction Job Market Volatility

2022-11-01T21:19:24-05:00

The count of open, unfilled jobs for the overall economy increased in September, rising from 10.3 million open positions to 10.71 million. This represents a small increase from a year ago (10.67 million). This increase occurs despite signs of a slowing economy amidst aggressive monetary policy tightening by the Fed. The hotter than expected labor market data pushed the 10-year Treasury rate back above 4%. Ideally, the count of open, unfilled positions slows to the 8 million range in the coming months as the Fed’s actions cool inflationary pressures for the U.S. economy. However, while higher interest rates are having an impact on the demand-side of the real economy, the ultimate solution for the labor shortage will not be found by slowing demand, but by recruiting, training and retaining skilled workers. The construction labor market saw an increase for job openings in September despite economic activity slowing, particularly for the housing market. The count of open construction jobs increased from 386,000 to 422,000 in September. This is actually higher than the estimate from a year ago (348,000). The labor shortage persists. The construction job openings rate moved higher, increasing to 5.2% in September after 4.8% in August. The data series high rate of 5.5% was recorded in April. The housing market remains underbuilt and requires additional labor, lots and lumber and building materials to add inventory. However, the market is slowing due to higher interest rates. Nonetheless, hiring in the construction sector remained solid at a 4.7% rate in September. The post-virus peak rate of hiring occurred in May 2020 (10.4%) as a post-covid rebound took hold in home building and remodeling. Consistent with slowing of building activity, construction sector layoffs increased to a 2.1% rate in September. In April 2020, the layoff rate was 10.8%. Since that time however, the sector layoff rate has been below 3%, with the exception of February 2021 due to weather effects. The number of layoffs in construction increased to 166,000, compared to 100,000 a year ago. The number of quits in construction in September (152,000) was lower relative to the measure a year ago (188,000). Looking forward, attracting skilled labor will remain a key objective for construction firms in the coming years. However, while a slowing housing market will take some pressure off tight labor markets, the long-term labor challenge will persist beyond an ongoing macro slowdown. Related ‹ More Prospective Buyers Are Actively Searching for a HomeSeptember Private Residential Spending Stays Flat ›Tags: economics, employment, home building, housing, JOLTS

Construction Job Market Volatility2022-11-01T21:19:24-05:00

Job Growth Slows in September

2022-10-07T10:17:30-05:00

Job growth slowed in September as the Fed raises interest rates aggressively to fight inflation, but the overall labor market remains tight. The unemployment rate edged down to 3.5% as the number of persons in the labor force decreased by 57,000 in September. Total nonfarm payroll employment increased by 263,000 in September, following a gain of 315,000 in August, as reported in the Employment Situation Summary. It marks the lowest monthly job gain in the past 17 months. The estimate for August remained unchanged, while the July increase was revised up by 11,000, from +526,000 to +537,000. In the first nine months of 2022, nearly 3.8 million jobs were created, and monthly employment growth averaged 420,000 per month. In September, the unemployment rate decreased by 0.2 percentage points to 3.5%, returning to its February 2020 level. The number of unemployed persons declined by 261,000 to 5.8 million, while the number of employed persons increased by 204,000. Meanwhile, the labor force participation rate, the proportion of the population either looking for a job or already with a job, edged down 0.1 percentage point to 62.3% in September. Moreover, the labor force participation rate for people who aged between 25 and 54 decreased to 82.7%. Both of these two rates are still below their pre-pandemic levels in the beginning of 2020, and are not fully recovered from the COVID-19 pandemic. For industry sectors, leisure and hospitality (+83,000), and health care (+60,000) led job gains in September, while employment in financial activities, transportation and warehousing, retail trade, and government declined over the month. Employment in the overall construction sector increased by 19,000 to 7.7 million in September, following a 11,000 gain in August. Residential construction gained 6,400 jobs, while non-residential construction employment gained 13,100 jobs in September. Residential construction employment currently exceeds its level in February 2020, while 84% of non-residential construction jobs lost in March and April have now been recovered. Residential construction employment now stands at 3.2 million in September, broken down as 901,000 builders and 2.3 million residential specialty trade contractors. The 6-month moving average of job gains for residential construction was 6,517 a month. Over the last 12 months, home builders and remodelers added 110,500 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 1,192,800 positions. In September, the unemployment rate for construction workers declined by 0.5 percentage points to 4.5% on a seasonally adjusted basis. The unemployment rate for construction workers has been trending lower, after reaching 14.2% in April 2020, due to the housing demand impact of the COVID-19 pandemic. Related ‹ State-Level GDP in the Second Quarter of 2022Tags: employment, labor force, labor force participation rate, residential construction employment

Job Growth Slows in September2022-10-07T10:17:30-05:00

Job Openings Fall as Economy Slows

2022-10-04T11:33:33-05:00

The count of open, unfilled jobs for the overall economy fell 10% in August, declining from from almost 11.2 million to 10.05 million. The decline for open jobs reflects the beginnings of a labor market retreat as the economy slows due to aggressive tightening of monetary policy by the Fed. While the economy continues to face a critical skilled labor shortage, particularly in sectors like construction, today’s data is an additional argument in favor of the Fed slowing its projected path of increasingly restrictive policy following its November meeting. Higher interest rates are having an impact on the demand-side of the real economy, which will be reflected in inflation data in future months. The ultimate solution for the labor shortage, however, will not be found by slowing demand, but by recruiting, training and retaining skilled workers. The construction labor market is also generally cooling off as economic activity slows in response to tighter monetary policy. However, the August data shows stability concerning the number of open, unfilled jobs in the construction industry. Nonetheless, this trend will likely weaken during the latter part of 2022 due to the policy decisions by the Federal Reserve. The count of open construction jobs ticked higher, rising from 353,000 in July to 407,000 in August. Despite recent slowing housing data, this is actually higher than the estimate from a year ago (362,000). The construction job openings rate moved higher, increasing to 5% in August after 4.4% in July. The data series high rate of 5.5% was recorded in April. The housing market remains underbuilt and requires additional labor, lots and lumber and building materials to add inventory. However, the market is slowing due to higher interest rates. Nonetheless, hiring in the construction sector remained solid at a 4.8% rate in August. The post-virus peak rate of hiring occurred in May 2020 (10.4%) as a rebound took hold in home building and remodeling. Despite slowing of building activity, construction sector layoffs remained low at a 1.6% rate in August. In April 2020, the layoff rate was 10.8%. Since that time however, the sector layoff rate has been below 3%, with the exception of February 2021 due to weather effects. The number of quits in construction in August (229,000) was slightly higher relative to the measure a year ago (189,000). Looking forward, attracting skilled labor will remain a key objective for construction firms in the coming years. However, while a slowing housing market will take some pressure off tight labor markets, the long-term labor challenge will persist beyond an ongoing macro slowdown. Related ‹ August Private Residential Spending Falls for Third Straight MonthTags: economics, employment, home building, housing, JOLTS, labor market

Job Openings Fall as Economy Slows2022-10-04T11:33:33-05:00

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