Eye On Housing
June data from the Job Openings and Labor Turnover Survey (JOLTS) suggest that hiring picked up for the construction industry in May and June.
For the economy as a whole, the June JOLTS data reveal that the hiring rate stood at 3.3% of total employment. The national hiring rate has now been in a 3.2% to 3.4% range for the last 11 months. The job openings rate (the red line below) remained at 2.7%, which matches the highest rate of job openings the national economy has had since the middle of 2008.
The overall trends has remained constant over recent months. Namely, the openings rate appears to be moving along an increasing trend, while the hiring rate remains flat. This suggests the economy is having problems adding jobs by filling open positions. We believe these facts are related to the housing markets’ ongoing challenges and the ability of workers to move to locations where employers are hiring. Another explanation is that employers are unable to find workers with the needed skills necessary to fill open positions.
For the construction sector, the June JOLTS data indicate that hiring picked up after slow months of March and April. Construction hiring was upwardly revised from 284,000 to 314,000 for May and further increased to 370,000 in June. This marks the largest level of hiring for the construction sector since March 2010, when the homebuyer tax credit program was coming to a close.
The increase in June construction hiring caused the hiring rate to jump to 6.7% of total employment. This is the largest hiring rate since the summer of 2011 and is a marked contrast with the spring of 2012.
Per the JOLTS data, net hiring for the construction sector remains negative, with 14,000 net positions lost for the sector for 2012 year-to-date. This is in part due to soft hiring levels in March and April, as well as higher levels of quits in May and June.
We noted last month that net lost jobs in construction for 2012 is hard to reconcile with increases for 2012 in construction spending and other measures of activity. It is tempting to conclude the weakness in construction employment is due to nonresidential construction, but other Bureau of Labor Statistics data indicate that home builders have not added many jobs in 2012. We suggested last month that upward revisions for hiring were a possibility, and this certainly happened with the May data. It may be the case that we see the June number revised upwards as well.
But other BLS data indicate that net home building employment has not changed much over the last year or so.
The monthly BLS net employment count for July (the employment count data are published one month ahead of the JOLTS data) indicate that total employment in home building stands at 2.023 million, 567,000 builders and 1.456 million residential specialty trade contractors.
Net job losses at the low point of home building employment (December 2010) totaled 1.46 million. Current net job losses are 1.427 million. And according to the BLS data, over the last 12 months, the home building sector has added only 16,000 net positions.
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