Open, unfilled jobs for the overall economy continued to move lower in June, falling to 9.6 million. The count of open jobs was 10 million a year ago in June 2022.
The construction labor market saw little change for job openings in June. The count of open construction jobs decreased to 374,000 after a data series high of 488,000 in December 2022. The overall trend is one of cooling for open construction sector jobs as the housing market slows and backlog is reduced, with a notable uptick in month-to-month volatility since late last year.
The construction job openings rate ticked down to 4.5% in June. The recent trend of these estimates points to the construction labor market having peaked in 2022 and is now entering a stop-start cooling stage as the housing market adjusts to higher interest rates.
Total job openings will continue to fall in 2023 as the labor market softens and unemployment rises. Ideally the count of open, unfilled positions slows to the 8 million range in the coming quarters as the Federal Reserve’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 worker demand, but by recruiting, training and retaining skilled workers. This is where the risk of a monetary policy mistake can be found. Good news for the labor market does not automatically imply bad news for inflation.
Looking forward, attracting skilled labor will remain a key objective for construction firms in the coming years. 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.
NAHB Chief Economist Dr. Robert Dietz provides more in this Eye on Housing post.