"Were it not for stimulus dollars now spreading throughout the economy, last month’s employment numbers would have been markedly worse." —ABC Chief Economist Anirban Basu
Employers in the nonresidential building construction industry cut 600 jobs in August, according the September 4 employment report by the U.S. Labor Department. On a year-over-year basis, nonresidential building construction employment decreased by 102,500 jobs to 727,100. (See what this means below)
Heavy and civil engineering construction employment dropped by 8,400 jobs in August and is down 120,800 from one year ago. Nonresidential specialty trade contractors continued their pace of job loss as employment declined by 33,900 from July and is now down 407,300 from August 2008.
Meanwhile, residential building construction lost 2,900 jobs last month. On a year-over-year basis, residential building construction employment is off by 129,600 jobs. The overall construction industry shed 65,000 jobs in August and 1,084,000 from the same time last year.
Total employment in the nation fell by 216,000 from July and is down by 5,830,000 from the same time last year. After a modest decline of 9.4 percent last month, the nation’s unemployment rate jumped to 9.7 percent in August, the highest level in 26 years.
What This Means
“Saying that the recession is over, and that the economy is good, is saying two very different things,” said Associated Builders and Contractors (ABC) Chief Economist Anirban Basu. “From a technical perspective, the recession is likely over, or about to end, based on the current performance of national output, industrial production, retail sales and other indices.
“But many components of a modern economy tend to struggle well after recession’s end and the labor market is one of them. As an example, the recession of 2001 ended in November of that year, but unemployment did not peak for that business cycle for another 19 months,” said Basu.
“Because of the massive loss in construction jobs since the beginning of the recession, the construction sector’s unemployment rate has been estimated to be in the range of 18 percent,” said Basu.
“With the federal government’s desire to see near-term improvement in economic conditions, states have been under significant pressure to accelerate stimulus spending related to infrastructure, which has unleashed a bevy of highway/road resurfacing projects across the nation. These projects are now translating into jobs, which is consistent with this month’s construction employment performance,” said Basu. “However, were it not for stimulus dollars now spreading throughout the economy, last month’s employment numbers would have been markedly worse."
