The U.S. labor market delivered a significant surprise in July, as employers cut 23,000 jobs instead of adding the roughly 80,000 jobs economists had expected.
Construction, however, moved in the opposite direction.
The industry added 22,000 jobs in July, bringing total construction employment to approximately 8.34 million, according to the latest data from the U.S. Bureau of Labor Statistics (BLS). Over the year, construction employment is up 82,000 jobs, or about 1%, compared with July 2025.
The national numbers were considerably weaker than economists anticipated. A Reuters survey had projected an increase of about 80,000 jobs in July; CNN cited a prediction of 90,000 jobs on air.
Meanwhile, the national unemployment rate edged down from 4.2% to 4.1%, a number that appears stronger than some of the underlying labor market data suggest. The labor force participation rate fell to 61.4%, its lowest level in more than five years, as approximately 264,000 people left the labor force.
The dynamic is part of what economists, including CNN Senior Reporter David Goldman, have described as a “low-hire, low-fire” labor market. Employers are hiring fewer workers, but layoffs also remain unusually low. Initial claims for unemployment benefits fell to 187,000 for the week ending July 18, the lowest level since 1969.
For workers, however, less firing does not necessarily mean greater opportunity. When fewer people are moving between jobs and employers are reluctant to add positions, those looking to enter or re-enter the workforce can face a considerably tighter market.
The July numbers also follow significant downward revisions to previous reports. BLS revised May employment growth from 129,000 jobs to 63,000 and June growth from 57,000 to just 20,000. Combined, May and June employment was 103,000 jobs lower than previously reported.
Nonresidential Construction Drives July Growth
Against that national backdrop, construction’s July gains stand out, particularly on the nonresidential side.
According to BLS data, nonresidential construction added approximately 20,000 jobs in July. Nonresidential specialty trade contractors accounted for most of the increase, adding 15,400 jobs, while nonresidential building construction added 4,200. Heavy and civil engineering construction employment increased by 400.
Compared with July 2025, employment across those three nonresidential categories has increased by more than 126,000 jobs, or approximately 2.6%.
Residential construction remains considerably weaker. Residential building construction lost 500 jobs in July while residential specialty trade contractors added 2,600. Combined residential construction employment remains below its level from a year ago.
The contrast reinforces a pattern that has emerged throughout 2026. Labor demand is not moving uniformly across construction markets. For firms working in nonresidential buildings, infrastructure and other design-build sectors, competition for skilled workers remains an important part of the project-delivery environment even as the broader U.S. labor market cools.
Wage Growth Meets Higher Prices
Workers are also seeing a mixed picture in their paychecks.
Average hourly earnings across the private sector increased just 0.1% in July and were up 3.2% over the previous 12 months, according to the July employment report. The most recent inflation data available show consumer prices were 3.5% higher in June than a year earlier, according to the BLS Consumer Price Index.
That means wage growth is currently running behind inflation. In practical terms, workers may be earning more dollars than they were a year ago without gaining additional purchasing power.
Construction wages remain comparatively strong. Average hourly earnings for construction production and nonsupervisory employees reached $39.24 in July, up from $37.31 one year earlier and well above the $32.40 average across private-sector production and nonsupervisory employment, according to BLS earnings data.
For construction employers, higher wages combined with continued demand for skilled workers can affect estimates, schedules, procurement decisions and a team’s ability to respond when project conditions change.
What the July Jobs Report Means for Design-Build
July presents a labor market moving in two very different directions.
National employment has weakened substantially, with an outright job loss in July following steep downward revisions to May and June. At the same time, historically low unemployment claims suggest employers are not broadly cutting their existing workforces. Instead, the economy increasingly resembles one in which businesses are reluctant both to hire and to fire.
Construction, and nonresidential construction in particular, is behaving differently. The industry continues to add workers, with year-over-year employment growth concentrated in the sectors most closely associated with commercial, institutional and infrastructure work.
That does not eliminate construction’s longstanding workforce challenge. If anything, the divergence makes workforce planning more important. Labor conditions can vary considerably by sector, geography and trade, even when national indicators suggest hiring is slowing.
For design-build teams, bringing Owners, designers, builders and key trade partners together earlier gives teams an opportunity to account for those realities alongside cost, schedule and procurement considerations before workforce constraints become project problems.
