“Paradoxically, the rise in the June construction unemployment rate nationally and in many states both on a year-over-year basis and from May is a good sign,” said Bernard M. Markstein, president and chief economist of Markstein Advisors, who conducted the analysis for ABC. “The rise in the construction unemployment rate was a result of discouraged workers reentering the labor market in search of employment due to excellent prospects for obtaining a job in construction with good pay. The number of reentrants was greater than the market could absorb in a short period even as demand for construction workers remains strong, sending the unemployment rate higher.”

Because these industry-specific rates are not seasonally adjusted, national and state-level unemployment rates are best evaluated on a year-over-year basis. The monthly movement of the rates still provides some information, although extra care must be used in drawing conclusions from these variations.

From the beginning of the data series in January 2000 through June 2017, the national NSA construction unemployment rate from May to June has declined every year but one (June 2010), when it was unchanged. The rate for June 2018 was the first on record to increase from May, up 0.3 percent. Among the estimated state construction unemployment rates, 15 were down, 33 were up and two, Arizona and Indiana, were unchanged from May.

This rise in the various state construction unemployment rates occurred even as private NSA construction employment rose in 47 states from May. In two states, Alabama and South Carolina, construction employment fell, while in Hawaii, which only reports mining and construction employment combined, it was unchanged.

Nationally, NSA private construction employment increased 13,000 from May while the number of unemployed construction job seekers rose by 51,000, resulting in an increase in the June national construction unemployment rate. This can only be due to previously discouraged construction workers reentering the job market in search of work. This appears to have occurred throughout the country, among the vast majority of states, not concentrated in just a few states.

TOP FIVE STATES

The states with the lowest estimated NSA construction unemployment rates in order from lowest to highest were: Idaho, 1.7 percent; Iowa and Minnesota (tie), 1.9 percent; and South Dakota and Wyoming (tie), 2 percent. Both Iowa and South Dakota were in the top five in May. 

Idaho had the lowest rate in June, up from the 12^th lowest rate in May (tied with Colorado and Oregon). It was the state’s lowest June rate since the 1.1 percent rate in June 2007.

Iowa and Minnesota had the second lowest June construction unemployment rate. For Iowa, it was the fourth month in a row that it had the second lowest construction unemployment rate in the nation. (Iowa’s second lowest ranking in May is based on revised data, previously reported as the lowest rate). For Minnesota, it was up from tied with Nebraska for eighth lowest in May. For both states, it was their lowest June estimated NSA construction unemployment rate on record.

South Dakota and Wyoming tied for the fourth lowest construction June unemployment rate. For South Dakota, that was the same as in May based on revised data (previously reported as the third lowest rate). For Wyoming, it was up from 10^th lowest in May. It was Wyoming’s lowest June rate since the 1.6 percent rate in June 2013.

Montana, which had the lowest rate in May based on revised data (previously reported as tied with Maine for fourth lowest), dropped to 18^th lowest with a 4 percent construction unemployment rate in June, tied with Indiana. This was the largest increase from May in the construction unemployment rate among the states, up 3.2 percent. Nonetheless, it was the state’s second lowest June rate since the 2 percent rate in June 2007, after 2016, when it was 3.6 percent.

Maine, which had the fifth lowest rate in May based on revised data (previously reported as tied with Montana for the fourth lowest rate), dropped to 24^th lowest with a 4.4 percent construction unemployment rate in June. It also had the second largest monthly increase in its rate among the states, up 2.8 percent.

Vermont, which had the third lowest rate in May based on revised data (previously reported as second lowest rate), tied with Utah for the sixth lowest rate in June with a 2.2 percent rate.

BOTTOM FIVE STATES

The states with the highest NSA construction unemployment rates in order from lowest to highest were: Kentucky, 7.4 percent; Alabama, 7.6 percent; Alaska, 8.4 percent; West Virginia, 9 percent; and Mississippi, 10 percent. Four of these states—Alaska, Kentucky, Mississippi and West Virginia—were also among the bottom five states in May.

Mississippi had the highest rate in June compared to the second highest in May.

West Virginia had the second highest rate in June compared to fourth highest in May based on revised data (previously reported as third highest rate, tied with Arkansas). The state also had the largest year-over-year increase in its rate, up 2.5 percent.

Alaska no longer had the highest construction unemployment rate in the nation following 10 straight months of holding that dubious title, improving to third highest rate in June. The state also had the largest monthly decline in its rate, down 3 percent. However, along with Ohio, it had the second largest year-over-year increase in its rate, up 1.3 percent.

Alabama had the fourth highest rate in June compared to seventh highest in May.

Kentucky had the fifth highest rate in June, the same as in May.

Arkansas, which had the third highest rate in May, improved to seventh highest in June with a 6.6 percent rate, tied with New Mexico and Tennessee. Along with Idaho, it had the third largest monthly decline, down 1.1 percent.

Publication date: 8/03/18

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