Scary Economic Projections
The current job numbers are beginning to scare me a little. The overall unemployment rate rose to 8.2 in the latest Bureau of Labor Statistics (BLS) numbers released June 1.
New jobs being created reached 69,000, but fell far short of the 150,000 that the economists had predicted. Private industries added 82,000 jobs, but the public sector lost 13,000 jobs.
The construction industry numbers are somewhat confusing in that, according to the latest Associated Builders and Contractors (ABC) economic analysis, the construction industry lost 28,000 jobs in May while the unemployment dropped to 14.2% down from 14.3% in April and down from 16.3% in May of 2011. This might be attributable to the fact that a number of unemployed construction workers have stopped looking for work and when that happens, the BLS drops them from the monthly numbers.
The chief ABC economist Anirban Basu made the statement when the numbers were released that:
“The outlook for the nonresidential construction sector remains decidedly negative, with prospects for another near-term U.S. recession climbing materially in recent months.”
I suspect that some of his projections are the result of the continued softening of the public sector construction budgets for the heavy construction sector and the continued soft housing market. Also the lack of action in the current Congress on any budget should make all of us a little nervous.
Several of the “long wave” or Kondratiev watchers have been projecting another drop in the second half of the year. Hopefully the construction industry recovery in parts of the country like Texas will strengthen as we go into the summer months, and that will help head off a second depression this year. In the past, election years have typically brought good economic news as the parties do everything in their power to show strong job numbers going into the presidential elections. This one might be a little shaky.
You can see the construction sector numbers on ABC’s Construction Economic Update.