The count of open, unfilled jobs for the overall economy declined marginally in November on a month-over-month and year-over-year basis, a sign the labor market is slowing in response to tighter monetary policy, according to an analysis by the NAHB. Within the construction sector, the count for job openings also decreased in November on a month-over-month basis.
Ideally, the count of open, unfilled positions slows to the 8 million range in the coming quarters as the Fed’s actions cool inflation. 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 count of open construction jobs decreased from 390,000 to 388,000 month-over-month. The November reading is actually higher than the estimate from a year ago (366,000), a reminder of the persistent challenges of the skilled labor crisis in construction.
The housing market remains underbuilt and requires additional labor, lots and lumber and building materials to add inventory. However, the market has slowed due to higher interest rates. Nonetheless, hiring in the construction sector weakened to a 4% rate in November. 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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