Yesterday, the BLS released its April Job Openings and Labor Turnover Survey (JOLTS). The JOLTS report allows for a deeper look at the labor market beyond the plethora of statistics included with the monthly Employment Situation Report (which is best known for its Non-Farm Payrolls number). Overall, the JOLTS report showed robust openings levels, cycle highs for quit rates, strong gross hiring, and very slow layoff rates — a generally positive set of indicators for the US labor market.

The most interesting data point in the survey came from job openings at the industry level. Opening levels in the construction industry surged 11% MoM and 40% in two months to a record level. Typically, openings levels are a leading indicator for employment numbers in the construction industry, as shown in the first chart below. The uptick in openings could represent a pending surge in construction hiring (and therefore, activity).

On the other hand, construction openings haven’t consistently led residential construction activity (as measured by housing starts — 2nd chart below), proving a lagging indicator during the last cycle and a coincident one for most of this one.

The same is true for construction spending numbers, which captures residential spending correlated to starts and the nonresidential sector. The surge in construction openings actually looks a bit like the mid-2000s, with modest declines in spending off peak levels taking place as openings continue to surge. While the recent explosion in openings is interesting, it’s hard to be sure whether it’s a positive or negative sign for the construction industry.  Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and much more.

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