Updated April 5, 2024 at 1:08 PM ET
Construction companies helped to hammer together another strong month for the U.S. job market.
The Labor Department reported Friday that construction firms added 39,000 jobs in March — a remarkably strong showing in the face of high interest rates. Hiring was also robust in health care, restaurants and local government. The unemployment rate dipped to 3.8%, even as more than 400,000 people joined or rejoined the workforce.
"Today's release was a blockbuster jobs report and indicates that recession is not arriving anytime soon," said Anirban Basu, chief economist for the Associated Builders and Contractors (ABC). He noted that construction job gains in March were about twice as high as the monthly average over the last year.
The ABC's most recent Construction Confidence Index found nearly 48% of builders expect to add jobs in the next six months, while only about 11% expect job cuts.
That's surprising at a time when borrowing costs are so high. Mortgage rates are hovering around 6.8%, according to Freddie Mac. Of the jobs added in March, about 14,000 were in residential construction, 19,000 were in non-residential construction, and 6,000 were in civil engineering projects.
"We are seeing an uptick in project opportunities for our folks," said Ryan Odendahl, CEO of Kwest Group, a civil and industrial construction firm based in Perrysburg, Ohio. "We're doing everything from a large road construction project to bike path and park-style projects."
Kwest has about 340 employees and is looking to hire more. About 20% of the company's employees are military veterans, which Odendahl calls a good training ground.
"A squad leader is a foreman with different skills," Odendahl said. "The ability to work outside. The ability to change quickly and to handle adversity that happens on projects every day."
The unemployment rate for construction workers was 5.4% in March — higher than the national average but down from 5.6% a year ago.
"Young people are starting to see the opportunity, both from an earnings potential and a growth potential that the construction industry offers," Odendahl said. "We need to do a better job as an industry of telling some of the great things that are going on in construction. We are competing with all of the other industries in the economy for people."
Overall, U.S. employers added 303,000 jobs in March — significantly more than forecasters had expected. The strength of the job market has allowed the Federal Reserve to take its time in cutting interest rates.
"We don't need to be in an hurry to cut," Fed chairman Jerome Powell said recently at the Federal Reserve Bank of San Francisco. "We can wait and become more confident that in fact inflation is coming down to 2%."
The Fed will be watching closely when March inflation numbers are released next week. Average wages in March were up 4.1% — almost certainly outpacing the rise in prices.
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