With the economy having added 162,000 jobs in July, it’s clear the pace of job creation has slowed. Before the report, the average monthly gain for 2013 was 202,000 jobs.
One explanation for this slowdown is the failure of the construction sector to show a net gain in jobs since March, notes Kevin Logan, chief United States economist at HSBC. Indeed, the number of construction jobs fell by 6,000 in July.
By contrast, as recently as February, the sector added 48,000 jobs. And over the winter months between October and March, which were unusually warm, Mr. Logan notes, job creation in the construction sector was up an average of 23,000 a month.
For his part, Mr. Logan estimates that construction jobs will again grow in the second half of 2013, lifted by more residential construction.
That’s debatable. While the housing sector is healthier in terms of price gains, rising mortgage rates make the pace of new-home sales less certain in the months ahead.
At the same time, the relative recovery in the housing sector recently hasn’t come close to restoring anywhere near the level employment in construction that prevailed before the housing boom turned to bust, helping to bring on the recession.
At 5.79 million now, there are nearly two million fewer construction jobs than in late 2006.
Just why construction employment has been so weak, despite a pickup in construction, has puzzled economists. After all, it’s not like construction work can be outsourced to Asia or replaced by robots.
Instead, as is true in much of the private sector, it seems that builders are doing more but adding fewer workers.
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