Residential Construction Offsets All the Jobs Lost in March and April

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After seven consecutive months’ job gains, nonfarm payroll employment fell by 140,000 in December as virus cases surged. The unemployment rate was unchanged at 6.7% in December.

Total construction industry (both residential and non-residential) employment totaled 7.4 million in December. Residential construction employment rose by 22,700 in December to 3.0 million. In the past eight months, residential construction added 472,500 jobs in total. By the end of 2020, job gains in residential construction offset all the jobs lost in March and April, while only 61% of non-residential construction jobs lost in March and April were recovered.

In December, total nonfarm payroll employment declined by 140,000, reported in the Employment Situation Summary. It marks the first decline after seven consecutive months’ increases since May 2020.  The October increase was revised up by 44,000 from 610,000 to 654,000, and the November increase was revised up by 91,000 from 245,000 to 336,000.

Looking back at 2020, a year like no other, the economy lost 1.4 million jobs in March and 20.8 million jobs in April due to the impact of the COVID-19 pandemic and efforts to contain it. The April job loss was unprecedented in the history of data series since 1939. From May to November, 12.5 million jobs have been created. For the year of 2020, the average monthly employment growth was negative (-781,000), compared to the average monthly growth of 178,000 over all of 2019.

Meanwhile, the unemployment rate was unchanged at 6.7% in December. This was 8.1 percentage points lower than its recent high of 14.8% in April and 3.2 percentage points higher than the rate in February. The number of unemployed persons was unchanged at 10.7 million. The labor force participation rate, the proportion of the population either looking for a job or already with a job, was unchanged at 61.5% in December.

The December job loss reflected the increasing COVID-19 cases and efforts to contain the pandemic. While employments in leisure and hospitality, educational services, government, and other services declined, professional and business services, retail trade, construction, and transportation and warehousing had job gains.  Employment in leisure and hospitality declined by 498,000 in December. Almost three quarters of these drop occurred in food services and drinking places.

Additionally, according to the Household Survey supplemental data, which come from questions added to the Current Population Survey (CPS) since May 2020, 23.7% of employed persons teleworked or worked at home in the last 4 weeks specifically because of the coronavirus pandemic in December, up from 21.8% in November. In December, 15.8 million persons reported that they had been unable to work at some point in the last 4 weeks because their employer closed or lost business due to the coronavirus pandemic. Among those who reported that they were unable to work due to pandemic related closures, 12.8% received at least some pay from their employer for the hours not worked.

Employment in the overall construction sector increased by 51,000 in December, after a revised increase of 29,000 jobs in November. The number of residential construction jobs rose by 22,700 in December, faster than an increase of 15,800 in November. In the past eight months, 472,500 residential construction jobs were created, offsetting all the 456,800 residential construction jobs lost in March and April due to the pandemic.

Residential construction employment now stands at 3.0 million in December, broken down as 848,000 builders and 2.1 million residential specialty trade contractors. The 6-month moving average of job gains for residential construction was 27,000 a month. Over the last 12 months, home builders and remodelers added 57,200 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 999,300 positions.

In December, the unemployment rate for construction workers was unchanged at 8.6% on a seasonally adjusted basis. After hit 14.8% in April due to the impact of the COVID-19 pandemic, the unemployment rate for construction workers has been trending downward for the past eight months.



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