Here’s a surprising detail from Friday's jobs report: America is seeing insatiable building demand, but the sector that most directly benefits is shedding workers.
Why it matters: A material crunch and supply chain mess are holding down job gains.
Driving the news: The construction sector shed 20,000 jobs in May.
- In April, the industry (on net) added no jobs at all.
What’s happening: Last month’s losses were almost entirely driven by a steep decline of specialty trade contractors. Think roofers, drywallers or pipefitters — specifically those working on commercial projects.
- "A lot of it could be ... getting [construction] materials on job sites," Labor Secretary Marty Walsh told CNBC Friday.
The big picture: Home prices nationally rose the most since 2005, data out last week showed — a byproduct of strong demand, but not enough supply.
- Commercial building — particularly for fulfillment or data centers — is heating up too, says Anirban Basu, chief economist at Associated Builders and Contractors, an industry trade group.
But, but, but: Builders are struggling to source crucial materials like lumber, iron and steel — and prices for them have skyrocketed.
How it's playing out: "Projects are being postponed, then, of course, some construction workers are being released from employment," says Basu.
What to watch: Residential construction added a mere 1,900 jobs last month, a slower pace than what the country’s housing boom might suggest, Doug Duncan, Fannie Mae’s chief economist, told Housing Wire.