The number of job openings in construction collapsed in Jan, a sign that the Federal Reserve's campaign to raise interest rates is finally beginning to tear through the industry. The construction industry reported just 248,000 job openings in Jan.
The construction industry reported just 248,000 job openings in January. That is a decrease of a whopping 240,000 jobs from the month before and represents a 37.4% decline from a year ago, according to data released on Wednesday by the Bureau of Labor Statistics. The plunge shows that construction jobs are evaporating as old projects come to a close and aren’t being replaced by new ones, while soaring mortgage rates have led to a dramatic pullback in home sales.
“Yesterday’s commentary by Federal Reserve Chair Jerome Powell suggests that interest rates are set to go higher and stay elevated for longer than many had previously thought, which means that it may be a long time before construction job openings return to their previous highs,” Basu added.
One reason is that the housing market went from overheated to cold so fast that there were still a lot of homes under construction. As those construction projects finally start to come to an end, which it appears is now happening , those jobs will soon go away. “Job openings figures are not broken down by residential versus nonresidential construction, and while many nonresidential contractors continue to report lengthy backlog and numerous open jobs, the single-family homebuilding segment has entered a period of significant retrenchment,” Basu said.
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