Construction Unemployment Drops to 15.6 Percent in June 2011

Despite a loss of 9,000 jobs in June, the construction industry unemployment rate dropped to 15.6 percent - the lowest level since December 2008 - according to the July 8 employment report by the U.S. Labor Department. Meanwhile, the construction industry has added 2,000 jobs compared to the same time last year.

The nonresidential building construction sector lost 400 jobs in June and was flat year-over-year with employment standing at 657,300 (see graph below). The residential building construction sector shed 1,500 jobs for the month and has lost 15,900 jobs, or 2.8 percent, from the same time last year. Specialty trade contractor employment fell by 5,300 from May and 4,900 jobs, or 0.1 percent, from June 2010. The heavy and civil engineering construction sector shed 1,800 jobs for the month, but has added 23,000 jobs, or 2.8 percent, compared to the same time last year.

Across all nonfarm industries, the nation added a deeply disappointing 18,000 jobs in June, far short of the consensus expectation of a 125,000 monthly job increase. Year-over-year, nonfarm employment has expanded by 1,036,000 jobs or 0.8 percent. Private industries added 57,000 jobs in June and have added 1,695,000 jobs, or 1.6 percent, since the same time last year. Government employment shrunk by 39,000 jobs for the month and 659,000 jobs, or 2.9 percent, year-over-year. Overall, the nation's unemployment rate rose to 9.2 percent in June.

"Despite some better news from other data releases in recent weeks, today's employment report strongly suggests that the impact of higher energy prices, higher food prices and the three-headed crisis in Japan continues to impact the pace of economic activity and hiring in America," said Associated Builders and Contractors Chief Economist Anirban Basu. "The slowdown in economic momentum since March has translated directly into reduced demand for construction, which helps explain the 400 jobs lost in the nation's nonresidential building construction sector.

"There are other factors that may be impacting the economy, including the ongoing battle over the nation's debt ceiling and issues related to sovereign debt in Europe," Basu said. "Though oil prices have fallen since their peak of roughly $114 a barrel earlier this year, these other factors may prevent economic momentum from rebuilding in the near term.

"Though some may take solace in the falling construction unemployment rate, it is important to note that one of the reasons might be that former construction workers may be securing employment in non-construction industries," Basu said. "Still, others may have given up looking for construction work all together and are no longer counted in the most commonly used measure of our nation's unemployment rate."

View the previous employment report.

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