September Data Sending Mixed Signals
The nation’s construction industry added 8,000 net new jobs on a seasonally adjusted basis in September, according to data released today by the U.S. Bureau of Labor Statistics. The nonresidential sector added 11,700 jobs for the month, meaning residential construction lost several thousand positions on net. Nonresidential specialty trade contractors led the way, adding 8,500 net new positions over the course of storm-ravaged September.
The construction unemployment rate, which is based on a non-seasonally adjusted rate, remained unchanged at 4.7 percent. National unemployment, however, fell slightly to 4.2 percent, two-tenths of a percentage point lower than the previous month. September’s rate is the lowest since February 2001. The nation, however, lost 33,000 jobs on net last month, ending a winning streak that stretched seven years. The labor force participation rate rose to 63.1 percent.
The loss of more than 30,000 jobs in September represents a radical departure from trends apparent over the past several years. The presumption must be that Hurricanes Harvey and Irma had a considerable impact on labor market dynamics. These storms might also explain the significant growth among nonresidential specialty trade contractors. These courageous workers fix roofs, deal with shattered glass, and help to restart commerce by allowing structures to function. Alternatively, the increase in nonresidential employment observed last month may simply be the result of the ongoing increase in demand for human capital, a trend that has been apparent for many months.
Basing any key significant strategic economic decisions on the most recent employment numbers would be unwise. These data are simply too noisy statistically to be considered revealing. If there is anything to be gleaned from the September employment numbers, it is that wage pressures are becoming increasingly more apparent. With the nation still hurtling towards full employment, these pressures will only expand, particularly as Texas, Louisiana, Florida, Puerto Rico, and the U.S. Virgin Islands gobble up resources dedicated to the multi-month or multi-year task of rebuilding.