Job Market Gains Continue

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Surpassing recent dampened expectations, total payroll employment rose by 1.8 million and the unemployment rate declined to 10.2% in July. The U.S. labor market continues to recover from the COVID-19 crisis.

Residential construction employment rose by 24,000 in July to 2.8 million. Total construction industry (both residential and nonresidential) employment rebounded to nearly 7.2 million in July. It is worth noting, however, that nonresidential construction employment declined by 4,000, highlight the different fortunes of housing vs non-housing construction.

In the Employment Situation Summary for July, total nonfarm payroll employment increased by 1.8 million, following an increase of 4.8 million in June. The improvements in the past three months reflect the economy is recovering from the COVID-19 pandemic gradually. The May monthly change was revised up by 26,000 from 2,699,000 to 2,725,000, while the June increase was revised down by 9,000 from 4,800,000 to 4,791,000. After the economy lost 22.1 million jobs in March and April due to the impact of the COVID-19 pandemic and efforts to contain it, about 9.3 million jobs were created in the past three months. In July, total nonfarm employment was 12.9 million lower than its February level.

Employment in leisure and hospitality, an industry that was hard hit in the COVID-19 pandemic, increased by 592,000 in July.  The increase in leisure and hospitality accounted for about one-third of the gain in total nonfarm employment in July. Government, retail trade, professional and business services, and other services also had the significant gains in July, while mining and logging continued to decline.

Meanwhile, the unemployment rate dropped by 0.9 percentage points to 10.2% in July. In July, the number of employed persons increased by about 1.4 million, while the number of unemployed persons declined by 1.4 million to 16.3 million. Among all the unemployed persons, about 56% classified themselves as on furlough or a temporary layoff and expected to be recalled back to work. The labor force participation rate, the proportion of the population either looking for a job or already with a job, changed little at 61.4% in July.

Employment in the overall construction sector increased by 20,000 in July, after a revised increase of 163,000 in June. The number of residential construction jobs rose by 24,000 in July, after an increase of 85,000 in June.

Residential construction employment now stands at 2.8 million in July, broken down as 815,000 builders and 2.0 million residential specialty trade contractors. The 6-month moving average of monthly job changes for residential construction is -16,300 a month, mainly reflecting the largest job loss in April. Over the last 12 months, home builders and remodelers shed 61,400 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 863,100 positions.

In July, the unemployment rate for construction workers dropped to 11.3% on a seasonally adjusted basis, from 12.0% in June. The unemployment rate for construction workers has trended downward for the past ten years and remained at a relative low level in the beginning of 2020. The recent unemployment rate reflected the impact of the COVID-19 pandemic on construction industry.



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