Construction employment added 17,000 jobs on net in December 2023, according to Associated Builders and Contractors. On a year-over-year basis, the industry has expanded by 197,000 jobs—an increase of 2.5%.
The construction unemployment rate fell from 4.8% in November 2023 to 4.4% in December 2023. The national unemployment rate for all industries was unchanged at 3.7% in December 2023 as the U.S. economy added 216,000 jobs.
Nonresidential construction added 11,900 jobs in December 2023, with growth in two of three subsectors; nonresidential building added 8,100 jobs, and nonresidential specialty trade contractors added 4,300 jobs. Heavy and civil engineering lost 500 jobs.
“Despite strong construction industry employment growth, today’s jobs report was highly contradictory,” said ABC Chief Economist Anirban Basu. “On one hand, economywide payroll employment expanded faster than expected in December, and the unemployment rate remained unchanged at 3.7%, close to the lowest level in over a half a century. Construction employment increased for the ninth consecutive month, with the nonresidential segment adding jobs at a particularly rapid pace.”
Basu points out the contradiction between this and recent workforce and wage growth numbers.
“On the other hand, the labor force shrank by 676,000 persons in December, the largest decline since early 2021,” Basu said. “Wage growth also accelerated, with average hourly earnings up 4.1% year over year across all industries. That’s faster than expected and a level not consistent with a return to 2% inflation. Construction industry earnings have increased at an even faster rate over the past year.
“This is only one month’s data and could contain significant statistical noise,” Basu continued. “That said, the combination of faster wage growth and a smaller labor force suggests that interest rates could remain higher for longer.”
