Average hourly earnings for residential building workers* continue to rise in August but at a slower pace. Wage growth has retreated from the highest rate of 2021. The recent housing slowdown indicates that, while labor demand is still high, employers are cautious about hiring amid a slowing economy and rising interest rates.
According to the Bureau of Labor Statistics (BLS) report, average hourly earnings (AHE) for residential building workers were $29.32 in August 2022, increasing 3% from $28.45 a year ago. This was 16.8% higher than the manufacturing’s average hourly earnings of $25.11, 10.8% higher than transportation and warehousing’s, and 11.5% lower than mining and logging’s. Average hourly earnings for residential building workers have increased significantly since the COVID-19 pandemic recession. The year-over-year growth rate reached to 8% in October 2021, the highest rate since February 2019, but this rate is now decelerating. Indeed, the construction labor market is generally cooling off as economic activity slows due to tighter monetary policy.
Note: * Data used in this blog relate to production and nonsupervisory workers in the residential building industry. This group accounts for approximately two-third of the total employment on residential building industry.