June was an excellent month for overall net jobs creation in the U.S., according to the Bureau of Labor Statistics. Total employment in the nation rose by +850,000 positions.
The construction sector, however, was left out of the bonanza. Staffing among the ‘hard hat’ contingent contracted by -7,000 jobs. The major plus and minus employment shifts within construction occurred with residential specialty contractors (i.e., subcontractors), +13,000 jobs; nonresidential specialty contractors, -15,000 jobs; and heavy and civil general contractors, -11,000 jobs.
The U.S. seasonally adjusted unemployment rate economy-wide now stands at 5.9% compared with 11.1% in June of last year. Not seasonally adjusted ‘U’ is currently 6.1% versus 11.2% a year ago. Construction’s NSA unemployment rate is presently 7.5%, whereas it had been 10.1% 12 months ago.
June marks the first month in a while that year-over-year compensation rates in construction weren’t markedly different than for all jobs. Throughout last year, the y/y earnings of construction workers trailed ‘all jobs’ paychecks, sometimes by considerable margins.
In June, however, while year-over-year ‘all jobs’ earnings were +3.6% hourly and +3.9% weekly, workers in construction were receiving close to the same, +3.9% hourly and +3.4% weekly.
Where did the big jumps in jobs in June occur? Manufacturing added +15,000; retail trade, +67,000; ‘professional and business services,’ +72,000; education, +39,000; and ‘social assistance,’ +32,000.
Government employment climbed by +188,000, mostly at the local level, +124,000, although the states also signed on more staff, +69,000. The federal government cut personnel, -5,000.
One Sector Accounted for 40% of Total Jobs Climb
I’ve left the best news for deep into this report, though. The jobs count in the ‘leisure and hospitality’ sector in the latest month soared by +343,000, accounting for 40% of the nation’s +850,000 total jobs expansion.
The ‘leisure and hospitality’ NSA unemployment rate has corrected to 10.9%, nearly two-thirds lower than June 2020’s 28.8%.
The sector that suffered the most as the result of holds being placed on sporting events, concerts, and the like, with stay-at-home directives in place during the pandemic, is back off life support.
The +343,000 jobs figure for ‘leisure and hospitality’ in June came mainly in ‘accommodation and food services’, +269,000. In turn, the ‘accommodation and food services’ employment increase was made up of +75,000 jobs in hotels/motels and +194,000 in bars and restaurants.
Returning to construction to close this article, Table 1 shows the latest (May 2021) put-in-place capital spending figures calculated and published by the Census Bureau.
What’s most astonishing is the difference between how residential construction is performing versus nonresidential. The former has generated a +23.4% increase in dollar volume year to date in 2021 compared with January-May of 2020. Nonresidential work, however, has pulled back by -8.6%.
Table 1: Census Bureau’s Latest Put-in-Place Construction Spending Numbers – May 2021
NSA is not seasonally adjusted / SA is seasonally adjusted.
Data source: Census Bureau.