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The count of open, unfilled jobs for the overall economy declined in October on both a month-over-month and year-over-year basis to 10.3 million, signaling the labor market may be slowing in response to tighter monetary policy. In the construction labor market, the count of open construction jobs decreased from 423,000 to 371,000 month over month.

Ideally, the count of open, unfilled positions slows to the 8 million range in the coming months as the Fed’s actions cool inflationary pressures. While higher interest rates are having an impact on the demand-side of the economy, the ultimate solution for the labor shortage will not be found by slowing demand, but by recruiting, training and retaining skilled workers.

The construction job openings rate declined, falling to 4.6% from 5.2% in September. The data series high rate of 5.5% was recorded in April. Given the outlook for construction, it is possible that the count of open, unfilled positions for the construction industry has already peaked for this cycle.

The housing market remains underbuilt and requires additional labor, lots and lumber and building materials to add inventory. However, the market is slowing due to higher interest rates. Nonetheless, hiring in the construction sector weakened somewhat to a 4.3% rate in October. The post-virus peak rate of hiring occurred in May 2020 (10.4%) as a post-covid rebound took hold in home building and remodeling.

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