Job Gains Continue in February Amid Mixed Signals

2023-03-10T12:26:11-06:00

Job growth continued in February. After a revised 504,000 job gain in January, total nonfarm payroll employment increased by 311,000 in February, and the unemployment rate edged up to 3.6% from 3.4% in January. Wage growth increased to a 4.6% year-over-year gain from 4.4% last month, but down compared to February 2022. Today’s job report indicates that, overall, the labor market is still strong, but showing signs of slowing of a strong start for the year. Construction industry employment (both residential and non-residential) totaled 7.9 million and exceeds its February 2020 level. Residential construction gained 12,400 jobs, while non-residential construction employment gained 11,600 jobs in February. Residential construction employment exceeds its level in February 2020, while all non-residential construction jobs lost in March and April 2020 have now been recovered. Total nonfarm payroll employment increased by 311,000 in February, following a gain of 504,000 in January, as reported in the Employment Situation Summary. The estimates for the previous two months were revised downward. The estimate for December was revised down by 21,000 from +260,000 to +239,000, while the January increase was revised down by 13,000, from +517,000 to +504,000. Despite tight monetary policy, over 4.3 million jobs have been created since March 2022, when the Fed enacted the first interest rate hike in more than three years. The unemployment rate edged up to 3.6% in February. The number of employed persons increased 177,000, while the number of unemployed persons rose 242,000. Meanwhile, the labor force participation rate, the proportion of the population either looking for a job or already holding a job, edged up 0.1 percentage point to 62.5% in February, reflecting the increase in the number of persons in the labor force (+419,000). Moreover, the labor force participation rate for people who aged between 25 and 54 increased to 83.1%. While the overall labor force participation rate is still below its pre-pandemic levels at the beginning of 2020, the rate for people who aged between 25 and 54 is back to the pre-pandemic level. For industry sectors, leisure and hospitality (+105,000), retail trade (+50,000), government (+46,000), professional and business services (+45,000), and health care (+44,000) have notable job gains in February. Employment in the overall construction sector rose by 24,000 in February, following a 35,000 gain in January. Residential construction gained 12,400 jobs, while non-residential construction employment gained 11,600 jobs in February. Residential construction employment now stands at 3.3 million in February, broken down as 939,000 builders and 2.3 million residential specialty trade contractors. The 6-month moving average of job gains for residential construction was 6,917 a month. Over the last 12 months, home builders and remodelers added 90,300 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 1,292,600 positions. In February, the unemployment rate for construction workers decreased by 0.3 percentage points to 4.9% 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 ‹ Households’ Real Estate Asset Value Falls for First Time Since 2012Tags: employment, labor force, labor force participation rate, residential construction employment

Job Gains Continue in February Amid Mixed Signals2023-03-10T12:26:11-06:00

A New Year Starts with Strong Gains

2023-02-03T11:20:25-06:00

Job growth rebounded in January. After declines for five consecutive months, total nonfarm payroll employment increased by 517,000 in the first month of 2023 and the unemployment rate hit a 53-year low at 3.4% as more people entered the labor market. Construction industry employment (both residential and non-residential) totaled 7.9 million and exceeds its February 2020 level. Residential construction gained 5,500 jobs, while non-residential construction employment gained 19,300 jobs in January. Residential construction employment exceeds its level in February 2020, while 96% of non-residential construction jobs lost in March and April 2020 have now been recovered. Total nonfarm payroll employment increased by 517,000 in January, following a gain of 260,000 in December, as reported in the Employment Situation Summary. It marks the largest monthly job gain in six months. The estimates for the previous two months were revised upward. The estimate for November was revised up by 34,000 from +256,000 to +290,000, while the December increase was revised up by 37,000, from +223,000 to +260,000. The unemployment rate edged down to 3.4% in January, the lowest level since 1969. The number of employed persons increased by 894,000. Meanwhile, the labor force participation rate, the proportion of the population either looking for a job or already with a job, edged up 0.1 percentage point to 62.4% in January, reflecting the increase in the number of persons in the labor force (+866,000). Moreover, the labor force participation rate for people who aged between 25 and 54 increased 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. In January, job gains were broad-based, led by gains in leisure and hospitality (+128,000), professional and business services (+82,000), and health care (+58,000). Employment in the overall construction sector rose by 25,000 in January, following a 26,000 gain in December. Residential construction gained 5,500 jobs, while non-residential construction employment gained 19,300 jobs in December. Residential construction employment now stands at 3.3 million in January, broken down as 934,000 builders and 2.3 million residential specialty trade contractors. The 6-month moving average of job gains for residential construction was 6,100 a month. Over the last 12 months, home builders and remodelers added 114,600 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 1,282,900 positions. In January, the unemployment rate for construction workers ticked up by 0.1 percentage point to 4.4% 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 ‹ Further Downshift for the FedTags: employment, labor force, labor force participation rate, residential construction employment

A New Year Starts with Strong Gains2023-02-03T11:20:25-06:00

Uptick for Construction Job Openings in December

2023-02-01T17:15:38-06:00

The count of open, unfilled jobs for the overall economy increased in December, rising to 11 million, the highest level since July. This was a surprise rise, as noted by many analysts, particularly given a growing chorus of corporate hiring freezes and job cuts. For now, the December data appears to be more noise than signal, although certainly that conclusion could reverse given data for January. Ideally, the count of open, unfilled positions slows to the 8 million range in the coming quarters as the Fed’s actions cool inflation. While higher interest rates are having an impact on the demand-side of the 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 a similar increase for job openings in December as the housing market cools. The count of open construction jobs increased from 331,000 to 413,000 month-over-month. Despite a declining trend, the December reading is actually higher than the estimate from a year ago (359,000), a reminder of the persistent challenges of the skilled labor crisis in construction. The construction job openings rate increased to 5% in December. The data series high rate of 5.5% was recorded in April 2022. Despite recent data noise, it still appears that the count and rate of open, unfilled positions for the construction industry peaked in 2022 and is now trending lower as the housing market slows. The housing market remains underbuilt and requires additional labor, lots and lumber and building materials to add inventory. Hiring in the construction sector increased to a 4.6% rate in December. 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. Construction sector layoffs ticked up to a 2% rate in December. In April 2020, the layoff rate was 10.8%. Since that time, 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 153,000, compared to 133,000 a year ago. The number of quits in construction in December (125,000) was significantly lower than the measure a year ago (161,000). 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 the ongoing macro slowdown. Related ‹ December Private Residential Spending DipsTags: economics, employment, home building, housing, JOLTS

Uptick for Construction Job Openings in December2023-02-01T17:15:38-06:00

Wage Growth Slowing

2023-01-06T11:15:42-06:00

Job growth slowed in recent months, but the overall labor market remains tight. In December, total nonfarm payroll employment increased by 223,000, and the unemployment rate ticked down to 3.5%, back to its lowest point before the pandemic. However, in a positive sign for inflation, wage growth slowed to a 4.6% year-over-year gain, the slowest pace since August 2021. Construction industry employment (both residential and non-residential) totaled 7.8 million and exceeds its February 2020 level. Residential construction gained 9,500 jobs, while non-residential construction employment gained 17,900 jobs in December. Residential construction employment exceeds its level in February 2020, while 89% of non-residential construction jobs lost in March and April 2020 have now been recovered. Total nonfarm payroll employment increased by 223,000 in December, following a gain of 256,000 in November, as reported in the Employment Situation Summary. It marks the smallest monthly job gain since December 2019 (excluding three losses in 2020). Monthly employment growth has been falling for the past five consecutive months. The estimates for the previous two months were revised. The estimate for October was revised down by 21,000 from +284,000 to +263,000, while the November increase was revised down by 7,000, from +263,000 to +256,000. Despite the tight monetary policy, over 4.5 million jobs have been created in the past twelve months of 2022 as the economy continued to recover from the 2020 shutdown. Monthly employment growth averaged 375,000 per month in 2022, less than a 562,000 monthly average gain in 2021, but doubled the monthly average gain of 164,000 in 2019, the year before the Covid pandemic. The unemployment rate edged down to 3.5% in December, as the number of unemployed persons decreased to 5.7 million and the number of employed persons increased by 717,000. Meanwhile, the labor force participation rate, the proportion of the population either looking for a job or already with a job, edged up 0.1 percentage point to 62.3% in December, reflecting the increase in the number of persons in the labor force (+439,000) and the decrease in the number of persons not in the labor force (-303,000). Moreover, the labor force participation rate for people who aged between 25 and 54 ticked up to 82.4%, after three months of decreases. Both of these two rates are still below their pre-pandemic levels at the beginning of 2020 and are not fully recovered from the COVID-19 pandemic. For industry sectors, leisure and hospitality (+67,000), health care (+55,000), and construction (+28,000) had notable job gains in December, while employment in retail trade (+9,000), manufacturing (+8,000), transportation and warehousing (+5,000) and government (+3,000) changed little. Employment in the overall construction sector rose by 28,000 in December, following a 15,000 gain in November. Residential construction gained 9,500 jobs, while non-residential construction employment gained 17,900 jobs in December. Residential construction employment now stands at 3.2 million in December, broken down as 909,000 builders and 2.3 million residential specialty trade contractors. The 6-month moving average of job gains for residential construction was 6,717 a month. Over the last 12 months, home builders and remodelers added 98,300 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 1,213,200 positions. In December, the unemployment rate for construction workers declined by 0.3 percentage points to 4.3% 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 Third Quarter of 2022Tags: employment, labor force, labor force participation rate, residential construction employment

Wage Growth Slowing2023-01-06T11:15:42-06:00

Construction Job Openings Likely Peaked

2023-01-04T10:14:43-06:00

The count of open, unfilled jobs for the overall economy declined slightly in November, falling from 10.51 million open positions to 10.46 million. This represents a decrease from a year ago (10.92 million), a sign the labor market is slowing in response to tighter monetary policy. The degree of this slowing will be critical for the ongoing downshift in the size of rate hikes from the Fed during the first quarter. Ideally, the count of open, unfilled positions slows to the 8 million range in the coming quarters as the Fed’s actions cool inflation. While higher interest rates are having an impact on the demand-side of the 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 a decline for job openings in November as the housing market cools. The count of open construction jobs decreased from 390,000 to 388,000 month-over-month. The November reading is actually higher than the estimate from a year ago (366,000), a reminder of the persistent challenges of the skilled labor crisis in construction. The construction job openings rate was relatively unchanged this month, holding at 4.8%. The data series high rate of 5.5% was recorded in April 2022. Given the outlook for construction, it now seems clear the count and rate of open, unfilled positions for the construction industry peaked in 2022 and is now trending lower as the housing market slows. The housing market remains underbuilt and requires additional labor, lots and lumber and building materials to add inventory. However, the market has slowed due to higher interest rates. Nonetheless, hiring in the construction sector weakened to a 4% rate in November. 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. Construction sector layoffs held at a 1.7% rate in November. In April 2020, the layoff rate was 10.8%. Since that time, the sector layoff rate has been below 3%, with the exception of February 2021 due to weather effects. The number of layoffs in construction fell back to 129,000, compared to 150,000 a year ago. The number of quits in construction in November (138,000) was significantly lower than the measure a year ago (215,000). 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 the ongoing macro slowdown. Related ‹ November Private Residential Spending DipsTags: economics, employment, home building, housing, JOLTS

Construction Job Openings Likely Peaked2023-01-04T10:14:43-06:00
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