ABC: Rise in unemployment could signal good news for labor shortage woes

Dive Brief:

The unemployment rate in the construction industry rose slightly to 6.1% in August, up from 5.5% in July but down from 7.7% during August 2014, the Bureau of Labor Statistics reported.
Within the industry, nearly all sectors added positions — with the notable exception of nonresidential construction, which lost 700 jobs in August after losing 800 jobs in June and 5,600 in July, according to the Associated Builders and Contractors.
Overall, construction added what the ABC called a "modest" 3,000 net new jobs from the previous month. The residential sector added 2,400, while heavy and civil engineering added 1,500.

Dive Insight:

Despite the dip in nonresidential construction employment, ABC Chief Economist Anirban Basu said the numbers were likely just an "aberration" resulting from seasonal adjustments. He predicted that the BLS revisions released next month could show the sector actually added positions in August.

"It’s also true that the construction industry tends to lag the broader economy," he said. "Considering that August was the 66th consecutive month of private-sector job growth — the longest streak ever — there’s plenty of reason for optimism about the construction industry’s economic health."

Construction's August unemployment rate was the lowest August rate since 2007.

But a slowdown in the rapidly declining unemployment rate might in fact be welcome news, as last month's report — which found the construction unemployment level fell to a 14-year-low — led some to fear the already small pool of qualified workers was drying up too quickly.

"It’s not necessarily a bad sign for an industry that has been plagued by labor shortages," the ABC noted.

After last month's report, economists from the Associated General Contractors of America warned that if the supply of qualified labor grew even more scarce, it would have a negative impact on construction spending gains in the coming months.

Across all U.S. industries, August's unemployment rate slid to 5.1% — down from 5.3% in July — after the economy added 173,000 jobs.