Job Gains Slow in December

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Job gains slowed sharply for the second straight month in December as the omicron variant began to spread. Construction industry employment (both residential and non-residential) totaled 7.6 million, with 22,000 construction jobs added in December.

After seven consecutive monthly increases, residential construction lost 4,100 jobs in December, while non-residential construction employment rose by 27,000 jobs. Residential construction employment now exceeds its pre-pandemic level in February 2020, while 74% of non-residential construction jobs lost in March and April 2020 have now been recovered.

Residential construction employment now stands at 3.1 million in December, broken down as 886,000 builders and 2.2 million residential specialty trade contractors. The six-month moving average of job gains for residential construction was 4,783/month. Over the last 12 months, home builders and remodelers added 74,700 jobs on a net basis.

Since the low point following the Great Recession, residential construction has gained 1,080,300 positions. Total nonfarm payroll employment increased by 199,000 in December, following a gain of 249,000 in November, as reported in the Employment Situation Summary. It is the smallest monthly gain since January 2021.

Meanwhile, the unemployment rate fell by 0.3 percentage points to 3.9% in December, the lowest rate since the pandemic. It was 10.8 percentage points lower than its recent high of 14.7% in April 2020 and 0.4 percentage points higher than the rate in February 2020.

The December decrease in the unemployment rate reflected a decrease in the number of persons unemployed (483,000) and an increase in the number of persons employed (651,000). The labor force participation rate — the proportion of the population either looking for a job or already with a job — remained unchanged at 61.9% in December. It is the highest level since March 2020.

In December, the unemployment rate for construction workers declined by 1 percentage point to 4.7% on a seasonally adjusted basis. It is the lowest rate since February 2020. The unemployment rate for construction workers has been trending lower, after reaching 14.1% in April 2020, because of the housing demand impact of the COVID-19 pandemic.

Jing Fu, NAHB director of forecasting and analysis, provides more in this Eye on Housing post.

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