Nonfarm payroll employment rose by 146,000 in June, seasonally adjusted, the Bureau of Labor Statistics (BLS) reported today. The unemployment rate dipped to 5% for the first time since September 2001. BLS Commissioner Kathleen Utgoff noted, “Employment continued to trend upward in several component industries, including architectural and engineering services….Employment growth continued in construction in June [the 16th straight seasonally adjusted record month], with a sizable gain (13,000) in heavy construction. Construction employment has increased by 282,000 over the year.” That was a 4% increase, more than double the 1.6% gain in overall nonfarm employment. All five BLS construction employment categories rose over the year: residential buildings, 7%; nonresidential buildings 2%; residential specialty trades, 4%, nonresidential specialty trades, 3%; and heavy and civil engineering, 5%. Average hourly earnings in construction rose to $19.42, seasonally adjusted, up just 23 cents per hour (1.2%) over the past 12 months but 21% higher than the average for all nonsupervisory or production workers on private nonfarm payrolls.
Several reports this week augur well for retail, warehouse, and distribution construction. The International Council of Shopping Centers estimated yesterday that sales at chain stores open at least a year rose an average of 5.3% at 70 chains in June, the best showing of any month since May 2004. Target, J.C. Penney, Kohl's, and American Eagle Outfitters all raised their earnings estimates. Today the Census Bureau reported that sales of merchant wholesalers (except manufacturers' sales branches and offices) in May were 7% higher than in May 2004, and inventories were 10% higher, suggesting a need to build more warehouses.