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News June 18, 2024

Construction employment added jobs in May

Construction employment added 21,000 jobs on net in May, according to Associated Builders and Contractors. On a year-over-year basis, the industry has expanded by 251,000 jobs—an increase of 3.1%.

The construction unemployment rate fell from 5.2% in April to 3.9% in May. The national unemployment rate for all industries increased from 3.9% in April to 4% in May as the U.S. economy added 272,000 jobs.

Nonresidential construction added 17,100 jobs in May, with growth in all three subsectors. Nonresidential specialty trade contractors added 13,000 jobs; nonresidential building added 3,000 jobs; and heavy and civil engineering added 1,100 jobs.

“Every monthly employment report is important,” said ABC Chief Economist Anirban Basu. “But this year’s reports are scrutinized carefully for several reasons, including upcoming federal elections. Economists are asking whether indications of softening in certain parts of the economy might cause deterioration in the overall labor market and whether the virtuous cycle of consumer spending and job growth will persist. May’s report indicates that we remain in that virtuous cycle.

“Despite perpetual fears of recession and the dislocating impacts of high borrowing costs, the U.S. nonresidential construction industry is adding jobs rapidly and will continue to, according to ABC’s Contractor Confidence Index,” Basu continued. “While many would point to public infrastructure outlays as an obvious source of strength, this report indicates job growth among many industry segments. The rapid transformation of the U.S. economy continues to more than offset the negative impacts of elevated project financing costs.”

However, Basu said the news was not completely positive.

“Wage pressures picked up in May, likely quashing hopes for a Federal Reserve rate cut in July,” Basu said. “While the establishment survey indicated that the nation added 272,000 jobs in May on a seasonally adjusted basis, blowing through consensus expectations, the household survey indicated that the nation’s unemployment rate increased despite a shrinking U.S. labor force. What that means is that the headline job growth number emerging from the establishment survey may be overstating U.S. economic strength while also delaying the Federal Reserve’s response to potentially emerging economic weakness.”

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