Eye On Housing
Job gains accelerated in May as vaccination rates increased and COVID-19 restrictions lifted. Total payroll employment rose by 559,000 and the unemployment rate decreased to 5.8% in May.
In May, non-residential construction lost 21,800 positions, reflecting declines in nonresidential specialty trade contractors (-16,800), while residential construction employment rose by 1,900. Currently, residential construction employment exceeds its level in February 2020, while only 60% of non-residential construction jobs lost in March and April have been recovered. Aggregate construction industry (both residential and non-residential) employment totaled 7.4 million in May.
In May, total nonfarm payroll employment increased by 559,000, reported in the Employment Situation Summary. It marks the fifth consecutive gain after a decline of 306,000 jobs in December. The previous two months’ gains were revised higher. The March increase was revised up by 15,000, while the April increase was revised up by 12,000 from 266,000 to 278,000.
The economy lost 22.4 million jobs in March and April of 2020 due to the impact of the COVID-19 pandemic. During the first five months of 2021, 2.4 million jobs have been created. Total nonfarm employment in May 2021 is still 7.6 million lower than its February 2020 level.
Meanwhile, the unemployment rate declined to 5.8% in May, from 6.1% in April. It was 9.0 percentage points lower than its recent high of 14.8% in April and 2.3 percentage points higher than the rate in February 2020. The May decrease in the unemployment rate reflected the decrease in the number of persons unemployed (-496,000) and the increase in the number of persons employed (444,000). Meanwhile, the labor force participation rate, the proportion of the population either looking for a job or already with a job, decreased by 0.1 percentage point to 61.6% in May.
Employment in leisure and hospitality increased in May, as COVID-19 restrictions continued to lift. Government, health care and social assistance, educational services and professional and business services had job gains as well, while employments in financial activities, retail trade and construction declined.
Employment in the overall construction sector declined by 20,000 in May, following a revised decrease of 5,000 jobs in April. This month’s decrease in construction employment reflected a job loss in nonresidential specialty trade contractors (-16,800). Residential construction added 1,900 jobs in May, after a revised decrease of 10,100 jobs in April.
Residential construction employment now stands at 3.0 million in May, broken down as 872,000 builders and 2.1 million residential specialty trade contractors. The 6-month moving average of job gains for residential construction was 7,917 a month. Over the last 12 months, home builders and remodelers added 271,700 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 1,034,000 positions.
In May, the unemployment rate for construction workers rose to 7.4% on a seasonally adjusted basis. This was the first increase in the past thirteen months. The unemployment rate for construction workers has been trending lower, after reaching 14.1% in April 2020 due to the impact of the COVID-19 pandemic.
I live and work in SW Washington State on the Long Beach Peninsula, and I have seen a slight slow down w.r.t. Residential construction, which is about most of the construction here. It is a retirement area with not much industry other than natural resource extraction (longing, fishing, cranberries) and service industry (hotels etc…). I mostly have moved to (about 5 years ago) to selling cabinets and last month I really noticed a drastic decline in new construction, though some of this may be due to our county being slow to approve permits. People seem to realize, perceive, that the cost of construction is crazy high and have started to stop and think about building or remodeling. Where I live it seems that in the past we are always first into a downward trend and the last to come out of one.
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