A Simple Clear Construction Staffing Distress Indicator

Well before the pandemic, the construction sector was worrying over what was perceived as an acute shortage of labor. Much of the discussion on this topic over the past several years has been anecdotal. Or reference has been made to employment gains that have been less than they should be and unemployment rates that have sometimes turned spectacularly low.

December Worker Shortage Report GraphicBut it would be better to find some easy-to-understand visual representation of the problem. It’s my hope that Graphs 1 through 5 below, making use of JOLTS data, fit the bill.

From the Job Openings

Quarterly U.S. Put-in-Place Construction Forecasts Report, Winter 2021-2022

To tackle a +6.8% year-over-year CPI inflation rate, the Federal Reserve has stated it will be pursuing QT rather than QE in the year ahead, quantitative tightening rather than easing, and that there may be as many as three upwards adjustments to interest rates. On the residential construction side, the expectation of higher interest rates may counterintuitively speed up groundbreakings for a while as prospective new homeowners try to beat the financing cost increases.

Mid-December Economic Nuggets, With a Focus on Chemistry

Estimates of U.S. real (i.e., after inflation) gross domestic product (GDP) growth for this year have generally been revised down recently, by well-known forecasting agencies, from a range between +6% and +7% to a cooler +5%. Supply shortages have cut into output levels in many industrial sectors. And bad news about coronavirus variants is putting a damper on reopening efforts.