Eye On Housing
In June, total payroll employment rose by 850,000 and the unemployment rate was little changed at 5.9%. The June employment data shows strong growth momentum as more than 154 million people are fully vaccinated and COVID-19 restrictions on business are lifted.
Residential construction employment increased by 15,200 in June, while nonresidential construction lost 22,600 jobs, following a decrease of 21,700 jobs in May. Currently, residential construction employment exceeds its level in February 2020, while only 55% of nonresidential construction jobs lost in March and April have been recovered. Aggregate construction industry (both residential and nonresidential) employment totaled 7.4 million in June.
In June, total nonfarm payroll employment increased by 850,000, reported in the Employment Situation Summary. It is the largest gain in the past ten months. The April increase was revised down by 9,000, while the May increase was revised up by 24,000 from 559,000 to 583,000.
The economy lost 22.4 million jobs in the two months of 2020 (March and April) due to the impact of the COVID-19 pandemic. During the first half of 2021, 3.3 million jobs have been created. Total nonfarm employment in June 2021 is still 6.8 million lower than its February 2020 level.
Meanwhile, the unemployment rate was little changed at 5.9% in June. It was 8.9 percentage points lower than its recent high of 14.8% in April 2020 and 2.4 percentage points higher than the rate in February 2020. The number of persons unemployed (+168,000) was little changed. Meanwhile, the labor force participation rate, the proportion of the population either looking for a job or already with a job, was unchanged at 61.6% in June.
In June, employment in leisure and hospitality increased by 343,000, the most gain among all the major industries. Government, professional and business services, and retail trade had job gains as well, while employments in financial activities and construction were little changed in June.
Employment in the overall construction sector was little changed (-7,000) in June, following a revised decrease of 22,000 jobs in May. Over the month, nonresidential construction employment declined by 22,600, offset by a gain in residential construction (+15,200). The decrease in nonresidential construction employment reflected job losses in nonresidential specialty trade contractors (-14,800) and heavy and civil engineering construction (-10,900).
Residential construction employment now stands at 3.0 million in June, broken down as 873,000 builders and 2.2 million residential specialty trade contractors. The 6-month moving average of job gains for residential construction was 7,350 a month. Over the last 12 months, home builders and remodelers added 193,700 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 1,049,700 positions.
In June, the unemployment rate for construction workers rose to 7.9% on a seasonally adjusted basis. 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.
There are two important factors here. Government jobs accounted for 188,000 of the total gain, the unemployment rate remained unchanged and, although not mentioned, the labor force participation rate remained unchanged.
When over 22% of jobs gained are in government, you have to ask if the employment situation really improving.