July jobs report: Construction industry remains strong

Although the July jobs report saw the pace of hiring slow slightly, the labor market remains strong, particularly in the construction industry. Yahoo Finance Reporter Dani Romero joins the Live show to discuss the state of the construction labor market and breaks down the construction jobs by sector.

Video Transcript

JARED BLIKRE: The July jobs report saw the pace of hiring slow slightly, coming in a tad below expectations. Though, the labor market remains strong. In particular, we're looking at jobs in construction. Now, this is a bellwether industry that has proven surprisingly resilient, despite headwinds coming from elevated lending costs.

Joining us now is Dani Romero. And Danny, I was looking at this report. Construction jobs are the canary in the coal mine for me, but still, relatively strong here.

DANI ROMERO: Jared, these are really good numbers, and this is good news for construction workers. Jobs in this sector grew about 19,000 in July. If we take a look at those numbers, one of the sour spots was residential construction. More than 5,000 jobs were cut in July. One economist I spoke with said that this could be weather related, which we're seeing some of those disruptions.

But on the positive side, the report was boosted by non-residential construction building. Those are jobs that are-- meaning that build our hospitals and schools. More than 10,000 jobs were added there. Another bright spot was the heavy and civil engineering, also gained more than 2,000 jobs. And those jobs are connected to our infrastructure building.

Lastly, specialty trade contractors saw overall positive momentum. And if we take a look at those numbers, non-residential specialty contractors took a hit, more than 2,000 jobs were slashed. And this could be another sign that it will be a bumpy road for construction on the commercial real estate side. Some economists that I spoke to expect that spending for this area will actually weaken by about 40%.

But moving over, there are still some positive side on the residential side. They've added more than 13,000 jobs for specialty contractors. That means, more people are looking to renovate their kitchen and bathrooms. So overall, a positive sign, Julie and Jared.

JULIE HYMAN: You know it's interesting. I keep coming back to this interview we had on the show a couple of weeks ago with Bob Clark who is the chairman of Clayco, one of the nation's largest construction firms, does a lot of commercial and industrial construction. And he still emphasized how tight that market is, how hard it is to find skilled workers in construction when you're talking about the plumbers and engineers and electricians on all of these major projects. So that, sort of, reflected in these numbers.

DANI ROMERO: Yes

JULIE HYMAN: Over on the residential side, though, we've been talking about how there is a shortage of supply, right, in the residential housing industry? So what does this tell us about that? Because you would think there would still be a big demand for residential construction.

DANI ROMERO: Yeah. So in this report, there was some weakness on the residential side. But by no means does this mean that housing projects will be put on hold. If anything, more construction is about to begin. We saw other data that showed that construction spending for residential grew in June, both for multifamily and single-family projects. And we've also heard from the public home builders that they are continuing to build, they're capitalizing on this housing shortage that the US is dealing with, Julie.

JULIE HYMAN: OK. Really interesting stuff, Dani. Thank you so much. Dani Romero talking to us about construction jobs.