A Disappointing Employment Report

 

The continued, though slowing, decline in residential construction employment is in line with the low level of single-family housing starts. The overall unemployment rate for construction dropped to 21.6 percent in September from 22.5 percent the month before.

The September Employment Situation report from the Bureau of Labor Statistics (BLS) was painful — total nonfarm payrolls declined by 95,000 jobs. That included the elimination of 77,000 temporary federal census jobs as the data collection for the decennial census draws to a close.

Employment losses were amplified by the elimination of 83,000 state and local government jobs. Roughly 60 percent or 49,800 of the jobs, were lost in local education, primarily teachers, with state governments shedding another 7,800 education jobs.

Since June 2009, state and local governments have eliminated 367,000 jobs, including 269,000 lost since January — with the bulk of them from local government. Most of the reductions have been driven by the balanced budget requirements that most states operate under. 

Not all was bleak in September, as 64,000 jobs were added to private payrolls — a weak uptick, but a gain nonetheless, and the ninth consecutive monthly increase. Since January, the private sector has added 863,000 jobs, an average of 96,000 per month.

In addition, the July private employment gain was revised up from 107,000 to 117,000 and August was revised from 67,000 to 93,000. As the private sector picks up momentum, look for more landscape opportunities in the commercial sector and not municipalities, which have strict budgets.

Private sector job gains indicate that the economy is still growing, albeit slowly, and that a continued recovery is more likely than the economy falling back into recession. However, the unemployment rate was unchanged at 9.6 percent for the month — a stubbornly high number due to slow job growth, though down from its peak of 10.1 percent in October 2009.

The rise is largely due to underemployed workers — part-time workers who want full-time work — and indicates a reluctance among employers to hire more full-time employees.

Employment stability and job growth are keys to housing’s recovery and are needed to help boost the confidence of households that are considering buying or renting a home. NAHB continues to forecast slow employment advances for the remainder of the year as economic activity shows modest gains.

– Courtesy of NAHB