The U.S. Department of Labor's Bureau of Labor Statistics (BLS) released its employment data for June with great news. However, with it comes an interesting nuance, further strain of the skilled-labor shortage, and concerns over looming threats to future growth.
The overall employment market increased by 213,000 jobs in June. Construction employment in particular continued to rise by approximately 13,000 jobs. According to the BLS, the construction industry has added 282,000 jobs year to date, reaching 7,222,000 jobs, which is the highest level it's been since May 2008.
However, the overall unemployment rate ticked up to 4.0 percent from 3.8 percent because more people entered the labor force looking for employment. The number of unemployed workers in the construction industry also rose from 430,000 (4.5 percent) to 466,000 (4.7 percent) year over year.
“The construction industry continues to add workers faster than the economy as a whole, and the industry is paying premium wages to attract and retain those workers,” said Ken Simonson, chief economist of the Associated General Contractors of America (AGC), in a press release. “The employment gains are occurring in both residential and nonresidential construction. However, the industry is having to rely more and more on workers without construction experience, as the pool of unemployed construction workers has nearly evaporated.”
That skilled-labor shortage may be reflected in wages as employers seek to draw more workers with greater incentives. Year over year, national hourly wage averages in construction rose from $28.86 per hour to $29.71 according to the BLS data.
Economists are celebrating today but wary of the future because of the trade war and rising construction costs along with the skilled-labor shortage.
"New trade disputes and chronic underfunding of career and technical education programs pose a real threat to continued employment gains in the sector,” said Stephen E. Sandherr, chief executive officer of the AGC.
The stock market reflected the mixed outlook Friday as Chinese tariffs took effect and started a slide, but the better-than-expected BLS' jobs report prompted a jump. All parties are in agreement that the U.S. economy is in a good place today, but uncertainty for tomorrow prevails.