Construction employment added 25,000 jobs on net in January, according to www.abc.org. On a year-over-year basis, the industry has expanded by 294,000 jobs—an increase of 3.9%.
The construction unemployment rate rose from 4.4% in December 2022 to 6.9% in January. The national unemployment rate for all industries fell from 3.5% in December 2022 to 3.4% in January as the U.S. economy added 517,000 jobs.
Nonresidential construction added 19,300 jobs in January, with two of the three subsectors showing growth. Nonresidential specialty trade contractors added 16,500 jobs and nonresidential building added 4,000 jobs. Heavy and civil engineering lost 1,200 jobs for the month.
“It is virtually impossible to reconcile today’s employment numbers with other phenomena in the U.S. economy,” said Associated Builders and Contractors Chief Economist Anirban Basu. “America’s labor market remains red hot despite falling retail sales, declining industrial production, bloated inventories and high-profile layoff announcements.”
Basu said although jobs were added, the associated rising interest rates increase the possibility of a recession.
“While many will cheer the jobs report, the bond market did not, with interest rates rising immediately in response to the persistent and surprising strength of the nation’s employment market,” Basu said. “While contractors may be thrilled to hear that the labor market remains strong, associated upticks in borrowing costs increase the likelihood of a recession sometime later this year.
“Many contractors may shrug off such concerns given current elevated backlog,” Basu continued. “ABC surveys reveal that contractors plan to continue to hire and expand operations. Indeed, the nation’s nonresidential construction industry added more than 19,000 jobs in January. But the outlook may dim later this year as the cost of project financing continues to rise, setting the stage for what could be a meaningfully weaker 2024, at least in construction segments that are primarily privately financed.”