Despite rising interest rates and fears of an economic downturn, job growth in the U.S. had another strong month in April.
The U.S. jobs report, released Friday, showed that a total of 428,000 nonfarm payroll jobs were added in April. In addition, employment in the construction industry is now 21,000 jobs above its pre-pandemic level after the sector added 2,000 jobs.
The unemployment rate remained unchanged from March, holding steady at 3.6%. This rate is marginally higher than the pre-pandemic unemployment rate of 3.5% recorded in February 2020.
“Another strong month of job growth has brought U.S. employment to within 0.8% of its pre-pandemic level,” Mike Fratantoni, the Mortgage Bankers Association’s SVP and chief economist, said in a statement. “Job growth has averaged 523,000 over the past three months, which is much faster than can be sustained over time.”
However, at 62.2%, the labor force participation rate remains 1.2 percentage points below its pre-pandemic level.
While the overall level of employment in the construction industry did not see massive month-over-month changes, there was decent growth in residential construction (up 3,500 jobs from March 2022), heavy and civil engineering (up by 500 jobs month-over-month) and residential specialty trade contractors (up by 300 jobs from a month prior). A loss of 6,400 jobs in the nonresidential specialty trade contractor sector, however, is responsible for the modest overall increase.
“Residential building employment is up 6.9% compared with pre-pandemic levels, while non-residential building remains 5% below,” Odeta Kushi, First American’s deputy chief economist, said in a statement. “More hammers, more homes.”
In total, 8.395 million people were employed in construction and extraction in April, compared to 7.933 million a year prior, and 4.941 million were employed in installation, maintenance and repair occupations, slightly down from 4.946 million in April 2021.
While the number of employees in construction is on the rise, annual growth in average hourly earnings of production and nonsupervisory employees in construction slowed in April from 6.1% to 5.3%.
“The construction industry faces a shortage of skilled workers, and one way to attract and retain employees is to pay more,” Kushi said in a statement. “Construction employers face stiff competition for labor from other industries willing to pay more. Recall that construction quits rate surged in March to the highest rate since 2005. We need more hammers at work to build more homes, so higher quits is not good news for this labor-intensive industry.”
The real estate industry also saw job growth in April, adding a total of 7,700 jobs. The majority of these jobs (6,100) were in real estate, with another 700 coming in the rental and leasing services sector and 900 coming from lessors of nonfinancial intangible assets.
The lion’s share of the job growth in April came from the leisure and hospitality sector (up 78,000 jobs), the manufacturing sector (up 55,000 jobs) and the transportation and warehousing sector (up 52,000 jobs). Despite these gains, the leisure and hospitality sector remains 1.4 million jobs below its pre-pandemic level, and the manufacturing sector is down 56,000 jobs.
