Solid Job Gains in June
Despite interest rate hikes, job growth remained solid in June. Total nonfarm payroll employment increased by 372,000, following a gain of 384,000 in May, and the unemployment rate remained at 3.6% in June.
Construction industry employment (both residential and non-residential) totaled 7.7 million and has exceeded its February 2020 level. In June, residential construction lost 4,100 jobs, and non-residential construction added 16,500 jobs. Residential construction employment currently exceeds its level in February 2020, while 79% of non-residential construction jobs lost in March and April have now been recovered.
In the first half of 2022, more than 2.7 million jobs were created, and monthly employment growth averaged 457,000 per month. As of June 2022, total nonfarm employment is 524,000 lower than its pre-pandemic level in February 2020, almost fully recovered from the COVID-19 pandemic.
Meanwhile, the unemployment rate remained at 3.6% for the fourth straight month. It was 11.1 percentage points lower than its recent high of 14.7% in April 2020 and 0.1 percentage point higher than the rate in February 2020.
Employment in the overall construction sector increased by 13,000 in June, following a 34,000 gain in May. Residential construction employment stood at 3.2 million in June, broken down as 899,000 builders and 2.3 million residential specialty trade contractors.
The unemployment rate for construction workers declined by 0.5 percentage points to 3.6% on a seasonally adjusted basis — the lowest rate since May 2019. 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.
NAHB Director of Forecasting and Analysis Jing Fu provides a more detailed breakdown in this Eye on Housing post.
NAHB Chief Economist Robert Dietz has also noted that construction jobs are leveling off, as open construction jobs remained little changed in May, falling from 440,000 in April to 434,000. Layoff rates have remained below 3% since April 2020, with the exception of February 2021 due to weather effects, and hiring in the construction sector was little changed at a 4.7% rate in May.
“Looking forward, attracting skilled labor will remain a key objective for construction firms in the coming years,” Dietz concluded. “However, while a slowing housing market may take some pressure off tight labor markets, the long-term labor challenge will persist beyond an expected near-term recession.”