Tag Archives: Employment

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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JOLTS: Construction Job Openings Up in Recent Months

JOLTS: Construction Job Openings Up in Recent Months

from Eye on Housing by Robert Dietz

November data from the Job Openings and Labor Turnover Survey(JOLTS) indicate that despite a downward revision for October, the number of open positions in the construction sector remains elevated. With continuing growth in housing starts predicted for 2013, these data suggest increased employment levels for the construction sector in the months ahead.

For the economy as a whole, the November JOLTS data indicate that the hiring rate (blue line below) was unchanged at 3.2% of total employment. The hiring rate has been in the 3.1% to 3.4% range since January 2011. The job openings rate (red line below) was also unchanged at a rate of 2.7% in November. The openings rate has now been in the 2.5% to 2.7% range for one year.

Labor mkt Nov

From 2009 to the end of 2011, the openings rate for the overall economy moved roughly along an increasing trend. However, this growth in open positions slowed in 2012. Moreover, the hiring rate trended down in 2012. 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 government policy uncertainty is holding back employers from adding workers.

For the construction sector, the JOLTS data indicate that hiring levels picked up in November after a slight slowing during the Fall of 2012. November hiring for the construction sector totaled 351,000, marking the seventh month in a row of hiring in the construction sector above a 300,000 level. The significant month-over-month gain in hiring was consistent with the October JOLTS data, which showed an increase in job openings for the sector.

Job openings in construction remain elevated despite a downward revision for October’s spike in openings. The number of open positions  for October (99,000) and November (93,000) marks the highest two-month total in a year and a half. These data lend evidence of increased demand for construction workers and future growth in construction sector employment.

Res Constr Employment

The monthly BLS net employment count for December (the employment count data from the BLS establishment survey are published one month ahead of the JOLTS data) indicates that total employment in home building stands at 2.056 million, broken down as 565,000 builders and 1.491 million residential specialty trade contractors.

According to the BLS data, over the last 12 months, the home building sector has added 67,000 jobs. While an improvement over recent months, this is still below the levels of net employment many believe should have been gained given the significant pickup in home building in 2012. However, it may be the case that for many builders, increases in construction in 2012 resulted in more hours for workers rather than in significant gains in the number of workers hired.

Nonetheless, the elevated October and November numbers of  job openings rate bodes well for future construction employment reports.

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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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JOLTS Data: Growing Weakness for the Job Market

JOLTS Data: Growing Weakness for the Job Market

by Robert Dietz — Eye on Housing

May data from the Job Openings and Labor Turnover Survey (JOLTS) confirm an ongoing slowdown in the labor market, with net hiring for the construction sector (residential and nonresidential) turning negative year-to-date for 2012.

For the economy as a whole, the May JOLTS data reveal that hiring rates increased to 3.3%, one of the few pieces of good news in the report. The job openings rate (the red line below) also increased back to 2.7% after declining in April. More concerning, the separations rate was the highest in two years, driven in part by the highest layoff rate in a year. The number of quits has also been rising, which on the other hand might be a good sign in that workers feel confident in changing jobs. However, it could also be a sign of a declining labor participation rate, which is a negative for GDP growth.

Despite these changes, the overall trends remain the same. Namely, the openings rate appears to be moving along a sluggishly increasing trend, while the hiring rate remains flat. This suggests the economy is having problem creating jobs by filling open positions. We believe these facts are related to the housing market’s ongoing challenges and the ability of workers to move to locations where employers are hiring. Another explanation is that employers are unable to find workers with the needed skills necessary to fill open positions.

For the construction sector, the May JOLTS data indicate relatively unchanged levels of hiring, totaling 284,000 positions for May. The number of open positions in the construction sector remained steady in May at 77,000 positions, after a decline to 69,000 openings in April.

Overall, there is no doubt that hiring has slowed for the construction sector, with the hiring rate now at 5.2% compated to 6.7% from a year ago.

Per the JOLTS data, net hiring for the construction sector has turned negative, with 28,000 net positions lost for the sector for 2012 year-to-date.

This result is hard to reconcile with increases for 2012 in construction spending and other measures of activity. It is tempting to conclude the weakness in construction employment is due to nonresidential construction, but other Bureau of Labor Statistics data indicate thathome builders have not added many jobs in 2012. As with other data series, it is also possible that the seasonal adjustment factors are causing some problems in interpreting data.

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Where are the construction jobs?

Where are the construction jobs?

by Bill McBride on 7/06/2012  

Back in 2006, I predicted we’d see construction job losses in the seven figures. All through 2006 and into 2007, I was constantly asked: “Where are the construction job losses you predicted?”

And then it started … and the BLS reported construction employment fell 2.27 million from peak to trough. No one asks that question any more.

There were several reasons why construction jobs didn’t decline at the same time as housing starts. First, construction includes residential, commercial and other construction (like roads). Even after housing starts began to collapse, commercial real estate was still booming and workers shifted from residential to commercial (many commercial projects have long time frames – and many developers remained in denial). Also some construction workers are paid in cash (illegal immigrants), and these workers weren’t counted on the BLS payrolls.

Now people are asking “Where are the construction jobs?”

Oh, Grasshopper … the construction jobs are coming.

The graph below shows the number of total construction payroll jobs in the U.S. including both residential and non-residential since 1969 compared to housing starts. Unfortunately the BLS only started breaking out residential construction employment fairly recently (residential specialty trade contractors in 2001).

Right away we can see that construction employment isn’t just tied to housing starts. There are other categories that have been generally increasing over the decades.

Construction EmploymentClick on graph for larger image.

Notice that housing starts collapsed in 2006, but construction employment didn’t start falling until 2007 – and didn’t collapse until 2008. Some people will look at the sub-categories for construction, but there are two problems: 1) construction workers shift between categories, and 2) the BLS hasn’t been tracking these categories for very long.

Even though construction is down since the beginning of the year, and only increased by 2,000 jobs in June, construction employment appears to have bottomed, and should add to both GDP and employment growth in 2012.

Other construction indicators – housing starts, new home sales, construction spending, builder comments – are all improving (although public construction spending is decreasing), and construction employment will follow.

A little Kung Fu:

Young Caine: “Old man, how is it that you hear these things?”

Master Po: “Young man, how is it that you do not?”

The housing recovery is here. The construction jobs are coming.

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Construction Self Employment Rates are on the Rise

Construction Self Employment Rates are on the Rise

by Natalia Siniavskaia — Eye on Housing

Construction is known for employing a relatively high share of self employed workers. In fact, according to the 2010 American Community Survey (ACS), the construction sector registers the second highest share of self-employed among all industries, more than 26 percent of the employed labor force, i.e. more than one in four construction workers are self employed.  Only agriculture has a higher share of self-employed, close to 34 percent, while a national average for all industries stands at 10 percent.

It has always been common for some builders and remodelers to maintain relatively small payrolls and rely on subcontractors for a large share of the construction work.  Interestingly, self-employment rates in the construction industry started to rise during the housing downturn and increased from 24 percent in 2006 to 26 percent in 2010. At the same time a national self-employment rate fell from 11 to 10 percent, and self employment in agriculture declined from 41 to 34 percent. Moreover, states known to have been hit hardest by the housing downturn – Florida, California, Nevada, and Arizona – registered some of the highest jumps in the construction self-employment rates. According to the ACS, the share of self-employed construction workers rose in Arizona from 16 to 21 percent and in Florida from less than 24 to 29 percent. Similarly, the share of self-employed construction workers increased by more than 4 percent in Nevada and almost 4 percent in California. It is likely that during the downturn builders and remodelers who were no longer able to maintain a steady work flow may have tried to manage costs by eliminating payroll positions and joining the ranks of the self-employed.  It is also possible that some construction employees laid off during the downturn were able to stay in the industry by striking out on their own.

The 2010 ACS data also show that five New England states have the highest shares of self employed construction workers.  Maine, Vermont, New Hampshire register shares in excess of 40 percent – 43.1 percent, 41.1 percent, 40.3 percent, respectively – well above a national average. Connecticut and Rhode Island follow with 38.5 and 36.9 percent. Montana registers the sixth highest construction self employment rate in the nation, 34.9 percent, i.e. more than one in three construction workers in Montana are self-employed.  Interestingly, Maine, Vermont, New Hampshire and Montana also stand out for having relatively high shares of residential construction workersin their state employed labor force.

Residential construction employment and construction self-employment rates for all states can be found in NAHB: Residential Construction Employment across States and Congressional Districts (Table 1).

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