Why September’s hot jobs report is ‘terrible’ for construction

Construction added a total of 19,000 jobs in September, with the bulk of those gains coming on the nonresidential side, signaling that the Federal Reserve’s aggressive interest rate hikes have yet to quell demand for hard-to-find workers in the sector. Overall construction unemployment dropped to 3.4%, below the national rate of 3.5% for all industries, as nonresidential builders added 13,100 positions for the month and 181,500 for the year, a 4.2% gain from 12 months prior, according to an analysis of Bureau of Labor Statistics data conducted by Associated Builders and Contractors. But the gains in the overall job market worried Wall Street on Friday, since they indicate the Fed may need to get even more hawkish in its campaign to reign in runaway inflation. An additional report that came out this week indicates that cooling is already underway in the architecture, engineering and construction space. The latest quarterly market forecast from Newton, Massachusetts-based AEC consultant PSMJ Resources indicates proposal activity is already slipping.


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