Big Grin Greets Big Pickup Big on Youth Employment In any month before the pandemic, the total number of US jobs in May of +559,000 was recorded as excellent. And I don’t want to underestimate the achievement, especially since it beats the previous month’s figure of +278000. But as can be seen from Chart 1, even the swing of over half a million appears to be just a passing picture in the course of month-to-month moves over the past year and quarter. The seasonally adjusted unemployment rate improved in May to 5.8% from 6.1% in April. The non-seasonally adjusted (NSA) unemployment rate fell to 5.5% from 5.7% in the previous month. Young people find work again. The unemployment rate in South Africa for individuals aged 16-19 has risen to 9.5%. And yes, “lightening to 9.5%” is an appropriate wording given that a year ago the unemployment rate in South Africa for those under 20 was 30.7%. The main reason for better youth employment was a year-on-year job recovery in the “leisure and hospitality” sector with 41.7%. From Table 1, the US job recovery ratio (also known as the payback ratio), compared to the drop in employment that occurred in the spring of last year, has risen to 65.9%, or nearly two-thirds. Graph 1: US: Total month-to-month job creation Last data point for May 2021. Data sources: Salary Survey, US Bureau of Labor Statistics (BLS). Diagram: ConstructConnect. Table 1: US Employment Recovery Monitor – May 2021 Data source: Bureau of Labor Statistics (BLS) Graph: ConstructConnect. Bad news / month Good news for construction workers The payback rate in the construction sector is now 79.8%. But May was not a good month for construction workers. From Chart 2, on-site work fell by -20,000 jobs in the last month, with non-residential subcontractors accounting for nearly all of the salary contraction. But in terms of increasing compensation, “hard hat” workers had more reason to smile than most workers in the workforce. While year-over-year wage gains for all jobs in May, including supervisory employees, were +2.0% hourly and +2.6% weekly, construction workers were blessed with a wage hike of +4.1% hourly and +4.6% weekly. Focusing on production employees only (i.e. excluding bosses), hourly and weekly “all jobs” wage increases in May were +2.4% and +3.0%. The construction workers subgroup performed significantly better at +4.4% and +4.9%. However, the interesting sidebar is that manufacturing workers in May had a +3.3% yearly/annual earnings increase, which isn’t very noticeable, but a +9.1% weekly compensation increase, which is cause for joy. (The “level” of compensation, on average, for construction workers, is still at least one-fifth higher than for production-line workers.) Many of the trends now driving the economy toward stimulating domestic manufacturing activity (eg, deglobalization; promotion of “purchasing”) America; “Even a boost to infrastructure spending, because it will require inputs from many construction products). US industrial employment rose in May by +23,000 jobs. The NSA unemployment rate in manufacturing has been tightened to 4.8% currently from 11.6% A year ago, the unemployment rate in the construction sector is currently 6.7%, down significantly from 12.7% in May 2020. Graph 2: Change in the level of employment in the construction sector in the US, month to month (M/M) – total and by category – May 2021 for each month, ‘net’ = zero. The “sub-trade” in the BLS data is referred to as the “niche” trade. Data source: Bureau of Labor Statistics (BLS) Graph: ConstructConnect. Graph 3: Year-on-year job change, total US industry and major sub-sectors – May 2021 (based on seasonally adjusted salary data) Data source: Salary Survey, US Bureau of Labor Statistics (BLS) Graph: ConstructConnect.