For the first time since 2008, unemployment in the in construction industry has dropped below double digits to 9.8 percent. The Bureau of Labor Statistics confirmed the addition of 195,000 jobs for June, 13,000 of which were in construction. Gains in construction were offset by the loss of 6,000 manufacturing jobs. The national unemployment rate remained at 7.6 percent.
Investing in Construction
June’s job growth comes on the heels of a recent industry-wide increase in construction spending. At its center, residential housing expenditures reached a 4-1/2-year high in May, again driving the industry to its highest level since 2008. May also saw industry-wide spending rise to a seasonally adjusted annual rate of $874.9 billion, a year-over-year jump of 5.4 percent.
Between the Lines
Though the addition of nearly 200,000 jobs is a positive step forward, looks continue to be deceiving. The total number of part-time workers rose for the fourth consecutive month, from 27.7 million to 28.1 million from May to June. Similarly, half of the new jobs in June are in the leisure industry (hotels, restaurants, retailers), which peaks during the busy summer season.
Also of concern is the lingering underemployment rate, which rose from 13.8 percent in May to 14.3 percent in June. This number represents a sizable demographic of displaced workers who have not merged back into the work force at equivalent levels to previous employment. If overall job numbers continue to rise over the next several months, underemployment will likely become the new barometer of the U.S. labor market.