UPDATE!  The U.S. Bureau of Economic Analysis (BEA) has again revised it initial numbers for real gross domestic product (GDP).  According to the “third” estimate released by the BEA, the decrease was slightly less at 7.85 percent for the quarter (or 0.3 percentage point less severe than the “second” estimate released in August). By comparison, in the first quarter of 2020, real GDP decreased 5.0 percent.

The “V”-Shaped rebound continued in August with jobs expanding by 1.4 million according the latest Labor Department figures. Construction non-seasonally adjusted levels also improved with unemployment decreasing to 7.6 percent [a drop of 1.3 percentage points from July, now up 4.0 percentage points from a year ago in August 2019 when it stood at only 3.6%].  Employment in the construction industry is approximately 400,000 positions short of last August’s near full employment levels.

The overall unemployment figure continued to recede from its record crest in April, slipping to 8.4 percent, a healthy reduction of 1.8 percentage points in just one month.  (“Unemployed persons” also fell 2.7 million to a total of 13.6 million per the government count). The “labor force participation” rate ticked-up to 61.7 percent. [NOTE: The “labor force participation” rate “typically” works inversely to the overall unemployment figures. Meaning: as it deteriorates/gets worse or smaller, it actually is counted as improving unemployment (i.e., people leaving the workforce are no longer viewed/counted as unemployed by the DOL)].  The “employment to population ratio” rose some 1.4 points to 56.5 percent.  Average hourly earnings for employees was reported at $24.81, fairly high due mostly to the fact lower wage earners remain out of work in market segments still in partial shutdowns by government orders. 

Workforce Statistics Chart

In a bit of good news, the U.S. Bureau of Economic Analysis (BEA) has issued the latest update to real Gross Domestic Product (GDP). According to the "second" more accurate estimate released by the Bureau, GDP decreased by 7.925 percent for the quarter, an improvement over the initial estimate released in July. (If the contraction stayed at this pace for 12 months, the annual rate would be 31.7 percent, an unreliable projection never used before the second quarter of 2020). The change was 1.2 percentage points better than the "advance" estimate that set the downturn at 9.125 percent. In the first quarter of 2020, real GDP decreased 5.0 percent. Profits decreased 11.1 percent at a quarterly rate in the second quarter after decreasing 12.0 percent in the first quarter.

The post-shutdown rebound continued in July, seeing jobs expand by 1.8 million according the latest Labor Department figures. Construction non-seasonally adjusted levels continued to improve with unemployment decreasing to 8.9 percent [a drop of 1.2 percent points from June, but still up 5.1 percentage points from a year ago in July 2019 when it stood at only 3.8%].  Overall, employment in the construction industry grew by 20,000 positions in July (for a combined rebound of 631,000 jobs for May, June, & July); leaving the industry approximately 445,000 positions short of pre-shutdown levels in February of 2020).

The overall unemployment figure continued to recede from its record crest in April, slipping to 10.2 percent, down 0.9 percentage points since June.  (“Unemployed persons” also fell 1.5 million to a total of 16.3 million per the government count). The “labor force participation” rate remained basically constant at 61.4 percent. [NOTE: The “labor force participation” rate works inversely to the overall unemployment figures. Meaning: as it deteriorates/gets worse or smaller, it actually is counted as improving unemployment (i.e., people leaving the workforce are no longer viewed/counted as unemployed by the DOL)].  Conversely, the “employment to population ratio” rose to 55.1 percent.  Average hourly earnings for employees remained at approximately $24.74 due mostly to the fact lower wage earners remain out of work in market segments still in partial shutdowns by government orders. 

SEE Workforce Statistics Chart

CIRT in conjunction with APCO Worldwide have collaborated on an Op-Ed that focuses on the role of the design / construction community for the nation's recovery from the pandemic and shutdown.

The Op-Ed contends that the design and construction community is a critical industry segment to measure the recovery of the nation. To that end, the opinion piece lays out two essential elements:

(1) The A/E/C industry is a good barometer of the overall economic activity/prosperity given it serves a broad cross section of markets, including private and public sector; [APCO’s Insight Survey indicates that 95 percent of the U.S. public thought it very or somewhat important “for the U.S. to continue to invest in its infrastructure” emerging from the shutdown]; and

(2) The A/E/C industry is labor intensive with good paying jobs and career paths, many not requiring four year college degrees. . . decentralized and scattered across the nation in communities of all sizes and backgrounds. [The same APCO Insight Survey found: 90 percent of Americans agreed “apprenticeships & credentialing programs can lead to good paying jobs and career paths.”]

[See the Op-Ed and APCO Insight Survey for details].

The record rebound continued in June’s jobs expansion with a historic 4.8 million re-employments according the latest Labor Department figures. Construction non-seasonally adjusted levels saw continued improvement with unemployment sliding down to 10.1 percent [a drop of 2.6 percent points from May, but still up 6.1 percentage points from a year ago in June 2019 when it stood at only 4.0%].  Overall, employment in the construction industry grew by 158,000 positions in June (for a combined rebound of 611,000 jobs, cutting over half the total 1.1 million losses from March and April). The rehires where dispersed throughout the industry, including for example: (+135,000) in specialty fields and (+32,000) in buildings.

The overall unemployment figure continued to recede from its record crest in April, settling at 11.1 percent, down 2.2 percentage points in a month.  (“Unemployed persons” also fell 3.2 million to a total of 17.8 million per the government count). The “labor force participation” rate continued to climb to 61.5 percent. [NOTE: The “labor force participation” rate works inversely to the overall unemployment figures. Meaning: as it deteriorates/gets worse or smaller, it actually is counted as improving unemployment (i.e., people leaving the workforce are no longer viewed/counted as unemployed by the DOL)].  The “employment to population ratio” rose to 54.6 percent as well.  Average hourly earnings for employees remains high at $24.74 due mostly to the fact lower wage earners remain out of work in market segments still in partial shutdowns by government orders. 

See the Workforce Statistics Chart.

Over the years economists have developed a series of key indicators that are gauged to predict or indicate coming economic cycles (like downturns, recessions, or expanses, etc.). The key measures are reflected in the FMI indicators, last updated just prior to the late first and early second quarter 2020 shutdowns. [For details see FMI Indicators Chart].

Rebounding off the dreadful numbers from a month ago, May employment expanded at an unprecedented (and unexpected) historic 2.5 million jobs according the latest Labor Department figures. Construction non-seasonally adjusted levels saw some improvement with unemployment sliding back to 12.7 percent [a drop of 390 basis points from April, but still up 950 basis points from a year ago in May 2019 when it stood at nearly full-employment of only 3.2%].  Employment in the construction industry grew by 464,000 positions in May, approximately cutting in half the recent losses that had mounted to a painful 995.000.

The overall unemployment figure came down from its record level, registering a still very high 13.3 percent, yet down 140 basis points in a month.  (“Unemployed persons” also fell 2.1 million to a total of 21.0 million per the government count).  The “labor force participation” rate also improved to 60.8 percent. [NOTE: The “labor force participation” rate works inversely to the overall unemployment figures. Meaning: as it deteriorates/gets worse or smaller, it actually is counted as improving unemployment (i.e., people leaving the workforce are no longer viewed/counted as unemployed by the DOL)].  The “employment to population ratio” rose to 52.8 percent.  Average hourly earnings for employees remains high at $25.00 due mostly to the fact lower wage earners remain out of work in market segments still in full or partial shutdowns by government orders. 

SEE the CIRT Workforce Statistics Chart

The devastating impact of the compulsory economic shutdown has swamped the latest Labor Department job numbers in April, with jobs losses topping 20 million. Construction non-seasonally adjusted figures were also slammed by the downturn with unemployment climbing to 16.6 percent [a jump of 970 basis points above March, and up 1190 basis points from a year ago in April 2019 when it stood at only 4.7%].  This month, employment in the construction industry contracted by a stunning (206,000) positions.

The overall unemployment figure hit a record level since being tracked by DoL (starting in 1948) at 14.7 percent, up 1030 basis points in a month.  (“Unemployed persons” also spiked 15.9 million to a total of 23.1 million per the government count).  Conversely, the “labor force participation” rate tumbled down 250 basis points to 60.2 percent. [NOTE: The “labor force participation” rate works inversely to the overall unemployment figures. Meaning: as it deteriorates/gets worse or smaller, it actually is counted as improving unemployment (i.e., people leaving the workforce are no longer viewed/counted as unemployed by the DOL)].  The “employment to population ratio” fell by 870 basis points to 51.3 percent.  Although the average hourly earnings for employees improved -- up by $1.04 per hour, it was a consequence of the increasing unemployment levels among hourly wage earners. 

Real gross domestic product (GDP) decreased at an annual rate of 4.8 percent in the first quarter of 2020 according to the "advance" estimate released by the Bureau of Economic Analysis. In the fourth quarter of 2019, real GDP increased 2.1 percent. The first quarterly turn-down in nearly six years was driven by the near complete shutdown of the economy in an attempt to slow the spread of the COVID-19 (Wuhan virus). The current GDP estimate is based on source data that are incomplete and/or subject to further revision by the source agency. The "second" estimate for the first quarter, based on more complete data, will be released on May 28, 2020.