Job losses slow but not in construction; outlook for hiring, lending appears bleak
Nonfarm payroll employment fell by 216,000 and the unemployment rate climbed to 9.7 percent in August, seasonally adjusted (9.6 percent, not seasonally adjusted), the Bureau of Labor Statistics reported on Friday [Sept. 4]. The job drop overall was the smallest in a year, but construction employment fell 65,000, close to the average for the past three months. That decline accounted for 30 percent of the overall job loss, even though construction is only 5 percent of total payroll employment. Over the past year, construction shed 1,084,000 jobs (15 percent of its August 2008 total), nearly one-fifth of all jobs lost. For the fourth straight month, the 1.1 percent decline in nonresidential employment (nonresidential building, specialty trade contractors and heavy and civil engineering construction) exceeded the 0.9 percent drop in residential employment (residential building and specialty trades). The unemployment rate for construction workers was 16.5 percent, double the 8.2 percent rate of a year earlier and higher than any other industry. (Industry unemployment rates are not seasonally adjusted.) Architectural and engineering services employment, a harbinger of demand for nonresidential construction, dropped by 5,000, seasonally adjusted, half the monthly average over the past 12 months. Average hourly earnings in construction rose 3 cents to $22.66 in August, seasonally adjusted, a 12-month gain of 2.9 percent, compared to 2.6 percent for all private production or nonsupervisory employees, according to the Sept. 8 Data DIGest.