Residential Construction Job Growth Plateaus Short of Pre-Recession Levels

Overall construction employment grew by 11,000 jobs in April, with residential construction companies adding 3,400 positions, the Labor Department reported Friday. But home builder hiring has been nearly flat for a year as home price inflation, high mortgage rates, and material price concerns hit home buyer demand.

There were 3.3 million Americans employed in residential construction in April: 956,000 home builders and 2.4 million residential specialty trade contractors. Over the last 12 months, home builders and remodelers have added just 5,000 net new jobs. Over the last six months, the average monthly change in home building employment is -1,583.

In April, the unemployment rate for construction workers rose to 5.2% on a seasonally adjusted basis.

Since a low point in employment in 2010 following the Great Recession, residential construction has gained approximately 1.4 million positions. But the gains have stopped short of returning to peak home building employment in 2006 during the housing boom.

In the broader job market, total nonfarm payroll employment rose by 177,000 in April, which beat analysts’ expectations. But the estimates for the previous two months were revised down.

The monthly change in total nonfarm payroll employment for February was revised down by 15,000 to 102,000, while the change for March was revised down by 43,000 to 185,000. Combined, the revisions were 58,000 lower than previously reported.

The national unemployment rate remained unchanged at 4.2% in April.

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