The count of open construction jobs decreased to 374,000 in June, according to the Jobs Opening and Labor Turnover Survey. After peaking at 488,000 openings in December 2022, the overall trend is the construction labor market has been cooling for open construction jobs as the market slows and backlog is reduced.
The construction job openings rate ticked down to 4.5% in June. The recent trend of these estimates points to the construction labor market having peaked in 2022 and is now entering a stop-start cooling stage as the housing market adjusts to higher interest rates.
Despite additional weakening that will occur later in 2023, the housing market remains underbuilt and requires additional labor, lots and lumber and building materials to add inventory. Hiring in the construction sector slowed to 4.3% in June after a 4.5% reading in May. 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.
The count of open, unfilled jobs for the overall economy continued to move lower in June, falling to 9.6 million. While ongoing tight labor market conditions have raised the likelihood of a September Federal Reserve interest rate increase, the JOLTS survey is another data point indicating an ongoing but gradual cooling of macro conditions due to elevated interest rates. The count of total job openings will continue to fall in 2023 as the labor market softens and the unemployment rises. From a monetary policy perspective, ideally the count of open, unfilled positions slows to the 8 million range in the coming quarters as the Fed’s actions cool inflation.
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