Despite a cooling overall employment picture, the construction industry showed resilience in August, adding 34,000 jobs for the month. This month’s construction jobs gain nearly doubled the average monthly increase of 19,000 over the previous 12 months, underscoring remarkable strength in the face of broader economic uncertainty. Nonresidential specialty trade contractors and heavy and civil engineering construction were key drivers of the increase, with each sector adding 14,000 jobs in August. Even as other sectors grapple with economic headwinds, the construction industry continues to provide steady opportunities for workers.
Acting Labor Secretary Julie Su told CNN the growth in construction jobs was “heartening” because it demonstrates a commitment to improving infrastructure and ensuring the availability of “not just jobs but good jobs” throughout both urban and rural areas and in small and large communities across the country. “We want to fix roads and bridges, provide clean drinking water, high-speed internet,” Su said, “these are all infrastructure improvements,” projects that require workers and therefore contribute to job growth in construction.
This upward trend in construction jobs is noteworthy, especially in light of slower growth across the broader economy. With interest rates remaining high, the ability of construction to sustain growth illustrates the ongoing demand for infrastructure projects and development, particularly in nonresidential areas.
Slowing Employment Growth Across the Board
Outside construction, the overall U.S. labor market experienced weaker-than-expected growth. Employers added 142,000 jobs in August, a stronger showing than July’s revised 89,000 jobs. Still, the number fell short of economists’ predictions of 160,000, and the revisions for June and July further underscore a cooling labor market. The unemployment rate, however, fell slightly to 4.2%, indicating that a good number of people who were not in the workforce over the last few months have reentered it in August.
Su noted that the economy continues to grow steadily despite the lower-than-anticipated job numbers. The August report is part of a broader economic picture where the labor market remains strong and unemployment is historically low. “We wanted to see a transition from rapid growth to a steady and stable rate of growth,” she said, describing the job market’s shift as a “soft landing,” with not just the number of jobs increasing but also the quality of those jobs being emphasized. “Reaching our cruising altitude” is how Su described this transition from rapid growth to a more sustainable, steady pace.
CNN’s Julia Chatterley described the August report as indicative of a “slowing jobs market, not a collapsing jobs market.”
Wage Gains and Steady Female Representation in Construction
While overall job growth has slowed, women’s labor force participation reached a record high, underscoring the demographic’s significant role in the economy. Su believes the record-setting number of women in the workforce is a sign that job growth is “widely shared” across diverse demographic groups. However, in construction, women continue to represent a steady 14.3% of the workforce, maintaining roughly the same level seen over the previous 12 months.
Wages for private nonfarm payroll increased by 0.4% in August, and average hourly earnings have grown 3.8% over the past year. These numbers outpace inflation and reflect increased bargaining power for workers. In construction, wages saw solid growth as well, illustrating the industry’s strong demand for skilled labor. With construction employment continuing to rise, workers in the field are benefiting from increased bargaining power and competitive pay, helping to bolster the overall wage increase.
Federal Reserve’s Next Move Looms Large
The August jobs report comes at a pivotal time, as the Federal Reserve prepares for a significant decision on interest rates in mid-September. The slower-than-expected job growth may push the Fed to cut rates by 0.25%, though some economists believe a more substantial 0.5% cut could be in play. Chatterley notes, “if they cut by 0.5%, we may have to worry about what they are seeing that we aren’t.”
Moreover, Bloomberg notes the importance of rising wages, steady job growth and low unemployment in an election year for both Presidential campaigns. Bloomberg Senior Editor Chris Antsey said, “These numbers probably won’t impact the political debate much. For sure, the jobs market is softening but unemployment is holding steady and wages actually went up. Something for both campaigns to point to.”
The Fed’s actions will have lasting implications for business hiring and investment, particularly in sectors like construction where interest rates play a crucial role in financing large-scale projects. A smaller rate cut might signal confidence that the economy can avoid a deeper downturn; a larger cut could suggest underlying concerns about future growth.
