Tag Archives: Bureau of Labor Statistics

Eye on Housing: JOLTS: Rising Job Openings in Construction

JOLTS: Rising Job Openings in Construction

by Robert Dietz Eye on Housing

Recent government employment data suggest a pickup in construction sector job openings over the last half year. While consistent with the uptick in construction sector activity, particularly in home building, the data reflect only modest increases in employment thus far.

For the construction sector, Job Openings and Labor Turnover Survey (JOLTS) data from the Bureau of Labor Statistics (BLS) indicate that hiring levels continue to be strong enough to create net jobs (hiring minus separations). Hiring in construction totaled 319,000 in January 2013. Hiring for the sector has exceed 300,000 per month for 22 of the last 24 months.

const labor mkt_mar13

The number of open positions in the construction industry remained relatively high in the current report. At 98,000 open positions, the month of January had the second highest number of unfilled positions in the last 17 months. Successfully filling open positions with qualified workers is a top concern for home builders in 2013.

Measured as a three-month moving average, the openings rate (the blue line above) has been reflecting strength for the last six months. Combined with a declining sector layoff rate (nonseasonally adjusted), charted as a 12-month moving average in the graph above, these factors suggest good news for construction hiring in the months ahead.

Monthly employment data for February 2013 (the employment count data from the BLS establishment survey are published one month ahead of the JOLTS data) indicate that total employment in home building stands at 2.109 million, broken down as 578,000 builders and 1.531 million residential specialty trade contractors.

res const employment_mar13

According to the BLS data, over the last 12 months, the home building sector has added only 64,000 jobs. Since the point of peak decline of home building employment, when total job losses for the industry stood at 1.466 million, 125,000 positions have been added to the residential construction sector.

An outstanding puzzle remains the fact that the increase in building has outpaced employment growth for the industry. This could be due to increased hours for existing workers, but if true, it is not a sustainable situation. Expected increases in building should lead to significant growth in home building employment in 2013.

For the economy as a whole, the December JOLTS data indicate that the hiring rate remained at 3.1% of total employment. The hiring rate has been in the 3.1% to 3.4% range since January 2011. The job openings rate was also relatively unchanged at a rate of 2.7% in January. The openings rate has now been in the 2.5% to 2.7% range for more than one year.

labor market_mar13

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Eye on Housing: Open Construction Jobs, But No Hiring Surge Yet

Open Construction Jobs, But No Hiring Surge Yet

by Robert Dietz

Eye on Housing

Despite the expansion of home building activity in 2012, construction sector employment growth remains positive if tepid, according to government statistics.

For the construction sector, Job Openings and Labor Turnover Survey (JOLTS) data from the Bureau of Labor Statistics (BLS) indicate that hiring levels continue to be strong enough to create net jobs (hiring minus separations). However, December hiring was notably weak,with the hiring total for the construction sector at only 287,000 positions, down from 380,000 in November.

While it seems likely that this low number will be revised up next month, December still marked the seventh consecutive month for which the three-month moving average of hiring remained above 300,000.

const labor mkt

The number of open positions in the industry remained relatively high. At 92,000 open positions, the month of December had the second highest number of unfilled positions for 2012. Successfully filling open positions with qualified workers is a top concern for home builders going into 2013.

After benchmark revisions, monthly employment data for January 2013 (the employment count data from the BLS establishment survey are published one month ahead of the JOLTS data) indicate that total employment in home building stands at 2.091 million, broken down as 575,000 builders and 1.516 million residential specialty trade contractors.

res construction

According to the BLS data, over the last 12 months, the home building sector has added only 53,000 jobs. Since the point of peak decline of home building employment, when total job losses for the industry stood at 1.466 million, 107,000 positions have been added to the residential construction sector.

An outstanding puzzle remains the fact that the increase in building has outpaced employment growth for the industry. This could be due to increased hours for existing workers, but if true, it is not a sustainable situation. Expected increases in building should lead to significant growth in home building employment in 2013.

For the economy as a whole, the December JOLTS data indicate that the hiring rate dipped slightly to 3.1% of total employment from 3.3% in the previous month. The hiring rate has been in the 3.1% to 3.4% range since January 2011. The job openings rate was also relatively unchanged at a rate of 2.6% in December. The openings rate has now been in the 2.5% to 2.7% range for more than one year.

labor market

The ongoing weakness in hiring has several potential explanations. One, challenges in housing markets are preventing workers from relocating to labor markets with open positions. However, this “house lock” effect was recently challenged by a paper from economists at the New York Federal Reserve. A second possible explanation is a skills mismatch between available workers and open positions. This explanation is also hotly debated among various proponents of structural or cyclical explanations of post-Great Recession unemployment.

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BLS Data Revision: Home Building Employment Up

The post BLS Data Revision: Home Building Employment Up appeared first on Eye on Housing.

 

New Bureau of Labor Statistics (BLS) data indicate that employment in the home building industry was stronger over the last two years than initial estimates suggested.

We reported on the preliminary benchmark adjustment back in September. Due to the adjustment, the BLS estimates an additional 422,000 jobs were added to the economy as of March 2012. The revision occurs as the BLS annually supplements its estimates with more complete unemployment tax data.

Per the revised data, total employment in the home building sector (builders plus specialty trade contractors) was higher by 20,100 as of December 2012.

BLS benchmark adj

Under the older, unrevised data, home building employment increased by 62,600 from the beginning of 2011 until the end of 2012. Under the revised BLS data, home building employment increased by 92,600 over the same period.

The net growth (20,100) from the revision differs from the 30,000 difference above because the revised data has total home building employment falling by 9,900 more lost jobs in 2010.

Under the new tally, home building employment is up 4.7% from the cycle low. Despite the uptick in the jobs estimate, an open question remains regarding the mismatch between the increase in housing construction and the relatively small increase in employment. Possible explanations include an increase in hours worked of existing workers, possible future upward employment revisions, or measurement error.

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CR: Kolko: Here are the “Missing” Construction Jobs

Kolko: Here are the “Missing” Construction Jobs

by Bill McBride on 1/31/2013 

CR Note: This is from Trulia chief economist Jed Kolko:

Construction jobs are a big part of how housing recovery lifts the broader economy. But the construction rebound, so far, appears to be jobless. “Residential construction” jobs, as reported by BLS, were up just 1% in December 2012 from their lowest level since the housing bubble burst – even though new home starts in December 2012 were twice as high as their low point in 2009. Overlaying residential construction employment (monthly, in thousands, left axis) and construction starts (monthly, in thousands, right axis) data suggests a jobless housing recovery, with jobs struggling to turn around even as starts climbed sharply in 2012:

Construction JobsClick on graph for larger image.

Who is building all these new homes? If starts are now twice their lowest level, why aren’t residential building jobs also twice their lowest level, instead of up just 1%? The answer: this is the wrong way to look at construction jobs. It turns out that construction employment is approximately where it should be for the current level of construction activity. Here are three reasons why:

“Starts” aren’t the right measure of current construction activity. Units “under construction” is more relevant – especially now. The amount of construction activity this month depends not only on this month’s construction starts but also on construction starts in previous months. That’s because single-family construction takes 4-6 months between start and completion, and multi-unit-building construction takes 10-14 months, on average. Therefore, construction starts indicate what will happen to construction activity in the coming months – not necessarily where it is today. And, in this recovery, multi-unit buildings are an unusually high share of overall construction activity, so the typical new unit is under construction for longer, making starts an even-worse-than-usual proxy for current construction activity. Instead of starts, units “under construction” – also reported monthly by the Census – is the right measure of construction activity to compare with jobs. This changes the picture dramatically: while monthly starts in December 2012 were up 100% (that is, have doubled) since the bottom, monthly units under construction were up 32% from the bottom.

The “residential building” jobs category understates growth in residential construction jobs. The BLS “residential building” category covers general contractors and construction management firms but not subcontractors, which are covered under another category the BLS tracks, “residential specialty trade contractors.” Importantly, residential construction jobs have been shifting steadily from general contractors to specialty trade contractors throughout the boom, bust, and recovery, so the narrower “residential building construction” category understates recent growth in construction jobs. “Residential building” jobs in December 2012 were up just 1% from the bottom, while “residential specialty trade contractor” jobs were up 4%. The combined series is up 3% from the bottom. Of course, some construction workers might not be officially counted if they’re off the books, and others might work on both residential and non-residential projects and not fit neatly into one reporting category. Still, looking at both the “residential building” and “residential specialty trade contractors” gives a clearer picture than looking only at “residential building.”

Construction jobs do not move one-for-one with construction activity. Looking at the right measures over time – units under construction and the sum of the two jobs categories – jobs move up and down less than construction activity does. For every 10% increase (or decrease) in the number of units under construction, construction employment increases (or decreases) by a little more than 4%. One reason might be what economists call “labor hoarding” – firms hold onto more workers than they need in temporary downturns if the cost of firing and re-hiring is high relative to keeping them on. Therefore, firms might increase or reduce workers’ hours instead of hiring or firing. Another reason is other construction activities, like remodeling, might move differently with the business cycle than new construction and possibly even soften the ups and downs of demand for construction workers.

Overlaying these two series – “units under construction” (Census) and the sum of “residential building construction” and “residential specialty trade contractors” (BLS), we get:

Construction JobsUsing these measures, jobs track construction activity pretty closely, with a slight lag. Taking this lag into account, a simple time-series model suggests that construction employment is now just 2% lower than it should be for the current level of construction activity.

The picture might change tomorrow in the January jobs report. As part of tomorrow’s report, the BLS will release its annual benchmark revision of previously reported employment figures. The preliminary revision announced in September suggested that employment for construction overall (including non-residential) would be revised up 1.6% for the benchmark month (March 2012). If tomorrow’s official revision to residential employment is in that range, the jobless construction recovery might not be missing any jobs at all.

What does this mean for construction employment in 2013? Suppose starts rise another 20% in 2013 relative to 2012 – a bit slower than the 28% increase in 2012 relative to 2011. Recent trends suggest that the number of units under construction should be a hair over 20% higher in December 2013 than in December 2012. Even though units under construction didn’t grow as fast as starts in 2012, much of the effect of the increase in starts in 2012 will be on construction activity in 2013, not in 2012. As a result, construction jobs – residential building plus residential specialty trade contractors – could grow 8% in 2013. The sharp increase in construction starts in 2012 should mean more construction jobs in 2013.

Read more at http://www.calculatedriskblog.com/2013/01/kolko-here-are-missing-construction-jobs.html#OtwpdYi7sTG21o6K.99

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Read of the Day: List of Improving Housing Markets Expands to 125 in November

List of Improving Housing Markets Expands to 125 in November

by David Crowe — Eye on Housing

The number of U.S. housing markets showing consistent improvement in three key measures of strength expanded by 22 in November to a total of 125, according to the National Association of Home Builders/First American Improving Markets Index (IMI). This marks a third consecutive monthly gain for the index, which now includes representatives from across 38 states as well as the District of Columbia.

The index identifies metropolitan areas that have shown improvement from their respective troughs in housing permits, employment and house prices for at least six consecutive months. Markets added to the list in November include such geographically diverse locations as San Diego, Calif.; Gainesville, Georgia; Omaha, Neb.; Louisville, Ky.; and Charlotte, N.C.

Not only did 22 additional markets qualify for the improving list in November, but the geographic distribution of included metros expanded from 33 states to 38 (plus the District of Columbia), while 97 out of 103 markets retained their spots on the list from the previous month.

The 125 markets on the IMI now represents about one-third of all the markets surveyed for this index.

The IMI is designed to track housing markets throughout the country that are showing signs of improving economic health. The index measures three sets of independent monthly data to get a mark on the top improving Metropolitan Statistical Areas.

The three indicators that are analyzed are employment growth from the Bureau of Labor Statistics, housing price appreciation from Freddie Mac and single-family housing permit growth from the U.S. Census Bureau. NAHB uses the latest available data from these sources to generate a list of improving markets. A metropolitan area must see improvement in all three measures for at least six consecutive months following those measures’ respective troughs before being included on the improving markets list.

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JOLTS Data: Seasonal Turnover Holds Back Construction Labor Market Growth

JOLTS Data: Seasonal Turnover Holds Back Construction Labor Market Growth

by Robert Dietz — Eye on Housing

September data from the Job Openings and Labor Turnover Survey(JOLTS) indicate construction hiring picked up in September after a slow August. However, an increase in layoffs held back net hiring for the month. As a result, the pace of hiring for the sector in 2012 remains lackluster, especially given the recent pickup in strength of housing construction activity.

For the economy as a whole, the September JOLTS data indicate that the hiring rate fell back to 3.1% of total employment, which was slightly lower on a year-over-year basis. In fact, the hiring rate for September was the first time in 14 months that the rate fell below 3.2% – a small difference perhaps, but one illustrating the sluggishness of growth in the labor market.

The job openings rate (the red line below) fell to 2.6%. in September from an upwardly revised 2.7% in August. The openings rate has now been in the 2.5% to 2.7% range for ten consecutive months.

labor market

From 2009 to the end of 2011, the openings rate moved roughly along an increasing trend. However, this growth in open positions has appeared to slow for 2012. Moreover, the hiring rate has remained flat for about a year,with a dip below recent levels for September. All told, these conditions reflect an economy having trouble expanding employment.  Relatively stronger reporting from the household and establishment labor market surveys for September andOctober may presage a stronger JOLTS report next month.

The ongoing weakness in hiring has several potential explanations. One, challenges in housing markets are preventing workers from relocating to labor markets with open positions. However, this “house lock” effect was recently challenged by a paper from economists at the New York Federal Reserve. A second possible explanation is a skills mismatch between available workers and open positions. This explanation is also hotly debated among various proponents of structural or cyclical explanations of post-Great Recession unemployment. Another explanation is that policy uncertainty, for example from the impending fiscal cliff, is holding back employers from adding workers.

For the construction sector, the September JOLTS data indicate that hiring picked up after a slow August. Construction hiring reached a total of 346,000 for the month of September, the third highest total for 2012. September marks the fifth month in a row of hiring in the construction sector above a 300,000 level.

After a reduced hiring rate in August (5.9%), the hiring rate for the construction sector rose to 6.3% in September. Per the JOLTS data, net hiring for the construction sector remains negative, with 17,000 net positions lost for the sector for 2012 year-to-date. This drop off is due to weak hiring in the spring, as well as relative weakness in the nonresidential sector.

Jobs openings in construction were essentially unchanged in September, coming in at 77,000 open positions compared to 81,000 in August. The openings rate was unchanged at 1.4%.

We’ve noted for the last few months that net lost jobs in construction for 2012 is hard to reconcile with significant increases for 2012 inconstruction spending and other measures of activity. For September, this effect was caused in part for an uptick in the nonseasonally adjusted measure of layoffs, which totaled 280,000 for the month, the highest monthly tally since January 2012 and the second highest since January 2011.

While it is true that weakness in construction employment is due in part to nonresidential construction, other Bureau of Labor Statistics data indicate that home builders have not added many jobs in 2012.

The monthly BLS net employment count for October (the employment count data are published one month ahead of the JOLTS data) indicate that total employment in home building stands at 2.033 million, broken down as 560,000 builders and 1.473 million residential specialty trade contractors.

Net job losses at the low point of home building employment (December 2010) totaled 1.46 million. Current net job losses are 1.417 million. And according to the BLS data, over the last 12 months, the home building sector has added only 12,000 net positions.

Recent data revisions suggest construction hiring could have been stronger over the period of April 2011 to March 2012.  We will know for sure in February when the final benchmark revision is published. This might be a case where startups in the home building and remodeling sectors are being missed by the establishment survey.

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JOLTS Data: Construction Hiring Dips in August, but Sector Job Openings Rise

JOLTS Data: Construction Hiring Dips in August, but Sector Job Openings Rise

by Robert Dietz — Eye on Housing 

August data from the Job Openings and Labor Turnover Survey (JOLTS) indicate construction hiring slowed in August after an elevated July. However, construction sector job openings rose for the month. Nonetheless, the pace of hiring remains lackluster, especially given the strength in housing construction activity for 2012.

For the economy as a whole, the August JOLTS data reveal that the hiring rate stood at 3.3% of total employment, which is basically unchanged over the last year. The national hiring rate has now been in a 3.2% to 3.4% range for the last 13 months. The job openings rate (the red line below) was unchanged for August at 2.6%. The openings rate has now been in the 2.5% to 2.7% range for nine months.

From 2009 to the end of 2011, the openings rate roughly moved along an increasing trend. However, this trend  appeared to slow for 2012. Moreover, the hiring rate has remained flat for about a year. All told, these conditions reflect an economy having trouble expanding employment.

The ongoing weakness in hiring has several potential explanations. One, challenges in housing markets are preventing workers from relocating to labor markets with open positions. However, this “house lock” effect was recently challenged by a paper from economists at the New York Federal Reserve. A second possible explanation is a skills mismatch between available workers and open positions. This explanation is also hotly debated among various proponents of structural or cyclical explanations of post-Great Recession unemployment. Another explanation is that policy uncertainty, for example from the impending fiscal cliff, is holding back employers from adding workers.

For the construction sector, the August JOLTS data indicate that hiring slowed for the month. Construction hiring reached a total of 308,000 for the month of August, the lowest pace since April. However, August marks the fourth month in a row of hiring in the construction sector above a 300,000 level.

After two strong months of hiring rates (June and July (6.4% and 6.5% respectively), the rate for August dipped to 5.6%. Per the JOLTS data, net hiring for the construction sector remains negative, with 20,000 net positions lost for the sector for 2012 year-to-date. This drop off is due to weak hiring in the spring, as well as relative weakness in the nonresidential sector.

Jobs openings in construction increased from 67,000 open positions in July to 82,000 open positions in August. The openings rate consequently increased from 1.2% to 1.5%, the highest rate since the spring.

We’ve noted for the last few months that net lost jobs in construction for 2012 is hard to reconcile with increases for 2012 in construction spending and other measures of activity. While it is true that weakness in construction employment is due in part to nonresidential construction, other Bureau of Labor Statistics data indicate that home builders have not added many jobs in 2012.

The monthly BLS net employment count for September (the employment count data are published one month ahead of the JOLTS data) indicate that total employment in home building stands at 2.033 million, broken down as 565,000 builders and 1.469 million residential specialty trade contractors.

Net job losses at the low point of home building employment (December 2010) totaled 1.46 million. Current net job losses are 1.417 million. And according to the BLS data, over the last 12 months, the home building sector has added only 23,000 net positions.

However, recent data revisions suggest construction hiring could have been stronger over the period of April 2011 to March 2012.  We will know for sure in February when the final benchmark revision is published.

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