The June jobs report that is getting so much positive spin does have a dark side that's getting remarkably little attention: There's little evidence of a summer construction boom. In fact, it's been a long time since there's been a dramatic uptick in construction jobs.
The construction sector added just 6,000 jobs in June over the previous month, and has grown 139,000 since December. The unemployment rate in the construction industry is 8.2 percent, a good deal lower than the nearly 10 percent it was last summer but still well above the national average unemployment rate of 6.1 percent. Plus, there are still nearly 1.7 million fewer construction jobs today than there were in June 2006.
Construction is worth watching for a number of reasons. In a healthy economy, people are building more things. People who get employed to build things often earn decent wages, and while a lot of the jobs are skilled, they don't usually require a college degree.
Construction is also a category where governments can stimulate demand and create jobs. Widening a highway, building a new light rail line, refurbishing a school or public building – all those are activities that employ people who need work on jobs that need doing. But with the federal government stymied in its ability to help state and local governments launch long-term public infrastructure projects, we're seeing the ripple effects in the employment statistics.
Efforts by President Obama and progressives in Congress to put more money into infrastructure spending have been blocked in Congress, especially in the Republican House. Now state and local governments face the possibility that federal funding for transportation projects could dry up by the end of the month unless Congress acts – causing the loss of up to 700,000 jobs, the White House estimates. But even if Congress acts, the action is expected to be nothing more than a patch to keep existing projects going a few more months rather than a measure that would fund new job-creating initiatives.
Highway, street and bridge construction has only added 9,000 jobs since January, and the total workforce in that category – which peaked at 360,000 in the summer of 2005, is now at 309,000. A similar story can be found in other job categories as well.
Construction hiring is a far broader story than just government spending, of course. But if the nation committed itself to addressing even a significant share of the $3.6 trillion in infrastructure needs the American Society of Civil Engineers says the nation will have over the next six years, that will mean millions of new, good-paying jobs in construction and a host of other fields. If we want really good news in our monthly jobs reports, that is the common-sense place to start.