Bureau of Labor Statistics data from the June release of the Job Openings and Labor Turnover Survey (JOLTS) are consistent with the economic weakness currently reflected in significant stock market declines.
Nonetheless, we continue to forecast that 2011 will be a year of a small net expansion of construction sector employment. However, job openings for construction fell in June, perhaps suggesting some slowing of construction activity growth in the early Fall.
With respect to the economy as a whole, for a second straight month layoffs were at a rate of 1.4% of total employment, the highest level since mid-2010. Nonetheless, the job openings rate for May and June was 2.3%, matching the highest rate of openings since the middle of 2008.
This growth in the openings rate (red line below), amid a weakening labor market, is a possible contradiction worth examining in future months. It could be a data issue, or it could be sign of a structural problem in the labor market. One possible explanation is that continued weakness in housing is limiting the ability of people to move from places where jobs are being eliminated to places where employment is in demand.
For the construction sector, the job openings rate fell from 1.8% to 1.2%, declining from 100,000 unfilled positions in May to only 66,000 open positions in June. May construction hiring, at 371,000 hires, was the highest levels of job creation for the sector since August 2008. This is the likely cause for the decline in open positions for the industry in June. However, it does suggest that the construction sector may slow in terms of job creation in the coming months.
We still expect to see 2011 as the first year post-Great Recession when total hires will exceed total separations (layoffs, quits, etc) in the construction sector. However as of June, total hiring exceeded total separations in the construction by a count of only 2,000 positions.