The count of open, unfilled jobs for the overall economy increased in September, rising from 10.3 million open positions to 10.71 million. This represents a small increase from a year ago (10.67 million). This increase occurs despite signs of a slowing economy amidst aggressive monetary policy tightening by the Fed.
The hotter than expected labor market data pushed the 10-year Treasury rate back above 4%. Ideally, the count of open, unfilled positions slows to the 8 million range in the coming months as the Fed’s actions cool inflationary pressures for the U.S. economy. However, while higher interest rates are having an impact on the demand-side of the real economy, the ultimate solution for the labor shortage will not be found by slowing demand, but by recruiting, training and retaining skilled workers.
The construction labor market saw an increase for job openings in September despite economic activity slowing, particularly for the housing market. The count of open construction jobs increased from 386,000 to 422,000 in September. This is actually higher than the estimate from a year ago (348,000). The labor shortage persists.
The construction job openings rate moved higher, increasing to 5.2% in September after 4.8% in August. The data series high rate of 5.5% was recorded in April.
The housing market remains underbuilt and requires additional labor, lots and lumber and building materials to add inventory. However, the market is slowing due to higher interest rates. Nonetheless, hiring in the construction sector remained solid at a 4.7% rate in September. The post-virus peak rate of hiring occurred in May 2020 (10.4%) as a post-covid rebound took hold in home building and remodeling.
Consistent with slowing of building activity, construction sector layoffs increased to a 2.1% rate in September. In April 2020, the layoff rate was 10.8%. Since that time however, the sector layoff rate has been below 3%, with the exception of February 2021 due to weather effects. The number of layoffs in construction increased to 166,000, compared to 100,000 a year ago.
The number of quits in construction in September (152,000) was lower relative to the measure a year ago (188,000).
Looking forward, attracting skilled labor will remain a key objective for construction firms in the coming years. However, while a slowing housing market will take some pressure off tight labor markets, the long-term labor challenge will persist beyond an ongoing macro slowdown.
Construction is a boom/bust industry. The FED uses intentionally to rachet up then rachet down the economy. Construction workers are sacrificed at the whim of the incompetents at the FED who screw things up then screw with the lives of construction workers to fix it.
Construction workers are underpaid, by a lot. A typical tradesman has the education equivalent of a BS degree with many beyond that with equivalents of MS and even PHD degrees. They work in abysmal conditions with high safety risk and high personal expenses for worn clothing, tools, vehicles and more. Still, they are paid less, oftentimes far less than a teacher who has less education, better working conditions, a vastly safer work environment and has a 1200 hour work-year while a construction worker has a 2000 hour work year, if s/he remains fully employed.
Retirement plans for construction workers are horrid, at least compared to other workers. A teacher can retire young thanks to government retirement plans that allow it. That same government punishes construction workers if they dare to draw from their retirement fund(s) early.
Maybe someday will be the time to become a construction worker, that day is not today.
Thom Wright, AA marketing, BA economics, MBA finance, former public school teacher, retired builder.
Live in North Texas employed in the real estate industry’s northern subur*bs: Plano, Frisco, Prosper, McKinney, Allen & Celina TX. This is one of the “hottest” new home building markets in America! Why? JOBS! JOBS! JOBS! Born in Dallas, TX. & never left Big D! Have been in real estate since 1973, it is not ROCKET SCIENCE in Texas to figure out, why it has employment tradesmen shortage issues. During the PANDEMIC many, many workers went back to Mexico, Republicans(the DO NOTHING ABOUT IMMIGRATION PARTY) made it a permanent issue – sheer foolishness! These undocumented immigrants just want to work & return to Mexico & other countries to help their families financially but are forced to “hide in the shadows” fearing deportation – nonsense! I am a Hispanic a born here LEGAL CITIZEN but the THE PREVIOUS PRESIDENT caused me so much concern for my safety(fear of being illegally deported) began carrying my PASSPORT as proof CITIZENSHIP! MADNESS! If all these tradesmen decided to leave the states the price of housing would DOUBLE OVER NIGHT here in Texas! Let’s be SMARTER & begin work on an intelligent fair immigration policy & stop bussing them to NYC from Texas & Florida! America is better than this???? USA passed a BILLION $$$$ bill to provide “seed money” to get “chips” manufactured once again in America, we can work on this immigration issue & make it work! Otherwise one day, a day of reckoning will crash the housing industry & the cost of homes will be unaffordable for the majority of Americans except for the wealthy! Inflation rates will skyrocket!