Eye On Housing
After an accelerated pace of layoffs in March and April, construction sector hiring roared back in May and continued at somewhat reduced pace in June, per data from the BLS Job Openings and Labor Turnover Survey (JOLTS).
In May, the hiring rate increased to 9.7%, after a subdued 3.7% rate in April. This was the strongest rate of hiring in the history of the JOLTS data. In June, the rate was 6.9%, slower than May but still well above average.
This pace of rehiring, combined with weakness in the nonresidential sector, reduced the open jobs rate to just 3.3% in June, with a 245,000 total of open construction sector jobs. The open job count was 325,000 a year ago. However, builders continue to cite limited access to skilled construction workers as a concern as they seek workers to undertake more home construction and remodeling.
The job openings rate is likely to experience choppiness in the months ahead given the divergent paths within the construction industry. Home building and remodeling are relative bright spots for the overall economy, while nonresidential construction will experience a period of weakness.
Citgroup economists say the composition of job gains suggests that hiring will continue to be strong, even if June might mark the peak. They said current forecasting models are too dependent on weekly claims data, which are distorted because workers hired part-time can still get benefits.