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The Power of Women in the Workforce

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Over the past 125 years, women have played a crucial and multifaceted role in the labor force. Increasing women’s participation in the workforce is not only essential for individual and family well-being, but also contributes significantly to overall labor force participation rates and economic growth by adding more workers and enhancing overall productivity1.   

Historically, women’s labor force participation rate rose rapidly between 1948 and 2000, peaking around 60% in 1999. During the same period, men’s participation rates declined. However, since 2000, the growth in women’s labor force participation has flattened and then declined.

According to the March 2025 Employment Situation Summary reported by the Bureau of Labor Statistics (BLS), women’s labor force participation rate held steady at 57.5%, and women now represent nearly half (47%) of the total U.S. labor force.

Selected Categories

Prime-age women (ages 25-54) represent a significant and growing segment of the U.S. labor force. As of 2024, they accounted for nearly 30% of the civilian labor force, compared to 34% for prime-age men. According to the latest data from the Current Population Survey (CPS), prime-age women had a labor force participation rate of 78%, the highest among all female age groups. This rate has fully recovered from the COVID-19 pandemic, surpassing its previous peak recorded in February 2020.

As discussed in the previous blog, higher levels of educational attainment are strongly associated with higher labor force participation and lower unemployment. Women with a bachelor’s degree or higher have played a vital role in shaping the labor market. In 2024, about 70% of women with this level of educational attainment were active in the labor force, compared to only 34% of women who had not completed high school.

The CPS data also reveals notable differences in women’s labor force participation based on parental status.  Women with older children (ages 6 to 17) and no children under 6 years old had a higher labor force participation rate than those with younger children. Interestingly, women without children had a relatively lower labor force participation rate compared to those with children. Further research from the Brookings Institution and The Hamilton Project2 highlights a significant shift: women with young children (under 5 years), especially those who are highly educated, married, or foreign-born, are more likely to be in the labor force now than they were before the pandemic.

Women’s labor force participation also varies by race and ethnicity. Among women ages 16 and over, Black women had the highest participation rate at 61%, followed by Hispanic women (59%), Asian women (59%), and White women (57%).

The figure below reflects the diversity and complexity of women’s roles in the workforce.

Women in Industry

As more women enter the labor force, they are increasingly shaping a broad range of industries–from healthcare and education to leisure and hospitality, retail, technology, and construction.

In 1964, women were primarily employed in a narrower set of sectors. The top four industries employing the most women at that time were: manufacturing; trade, transportation, and utilities; local government; and education and health services3.

By 2024, however, women’s participation in the workforce has expanded significantly, both in scope and impact. According to the latest CPS data, women dominated the education and health services sector, where they hold approximately 27.6 million jobs. That means seven in every ten workers in this field are women. Moreover, women now make up more than half of the workforce in several other key industries, including other services, leisure and hospitality, and financial activities.

Despite their growing role in the workforce, they remain underrepresented in certain sectors, most notably, construction. Although women now make up a significant portion of the overall labor force, they account for just 11% of total employment in the construction industry. Of those, only 2.8% of women work in actual trade roles, while most women in the industry are employed in:

Office and administrative support

Management

Business

Financial operations

Gender Pay Gap by Occupation

While the gender pay gap in the U.S. has narrowed significantly over the past few decades, it remains a persistent issue in the labor market. According to a study4 by the Pew Research Center, women earned about 65 cents for every dollar earned by men in 1982. By 2023, that figure had risen to approximately 82 cents on the dollar—a clear sign of progress. However, the pace of change has slowed considerably in recent years.

In 2024, the CPS data shows that women working full time earned a median weekly wage of $1,043, compared to $1,261 for men. This means women earned 83 cents for every dollar earned by men—a 17% gender wage gap.

At the occupational level, women earn less than men across all major occupational groups, even ones dominated by women. The smallest gender pay gap was found in community and social services occupations. In contrast, occupations in legal, sales and related, protective services, and production display larger disparities in earnings between women and men.

The Future of Women in the Workforce

Looking ahead to 2033, the number of women in the labor force is expected to continue growing, driven primarily by the prime-age women (ages 25 to 54). BLS employment projections estimate that roughly 3.2 million prime-age women will join the workforce between 2023 and 2033. During this period, their participation rate is projected to increase slightly, reflecting continued momentum in women’s economic engagement.

Meanwhile, the U.S. labor market is experiencing a critical shortage of skilled workers, especially in fields like STEM (science, technology, engineering, and math) and skilled trades. As the NAHB Chief Economist stated, “The ultimate solution for the persistent, national labor shortage will be found…by recruiting, training and retaining skilled workers.” This applies equally to the women’s labor force.

Women’s participation is closely tied to their access to education and skills development. As more women pursue higher education and specialized training, their career opportunities expand, particularly in fields previously dominated by men. This progress can help narrow the gender pay gap over time.

However, women often shoulder disproportionate family and caregiving responsibilities, not only during their reproductive years, but throughout their lives. According to the American Time Use Survey (ATUS), on a typical weekday, prime-age working women spent about four hours on caregiving and household tasks, such as household activities, caring for and helping household members, and purchasing goods and services. This is nearly twice the time men spent on the same activities. Many women face a tough decision between career advancement and family caregiving responsibilities, often leading to reduced work hours or even complete withdrawal from the labor force.

To support and increase women’s labor force participation, it may be beneficial to consider a range of policies and workplace reforms. For example, promoting flexible work arrangements can help women better balance professional and personal responsibilities. Narrowing the gender pay gap would also play a critical role in ensuring fair compensation and financial security. Furthermore, expanding access to affordable and high-quality childcare could remove a major barrier for many working mothers. In addition, continued investment in education and training programs would enable women to advance in their careers and contribute to broader, long-term economic growth.

To conclude, empowering women to succeed in the workforce not only improves individual and family well-being, but also strengthens the entire economy.

Note:

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State-Level Employment Situation: March 2025

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Nonfarm payroll employment increased in 37 states and the District of Columbia in March compared to the previous month, while it decreased in 12 states. Wyoming reported no change during this time. According to the Bureau of Labor Statistics, nationwide total nonfarm payroll employment increased by 228,000 in March following a gain of 117,000 jobs in February.

On a month-over-month basis, employment data was most favorable in Texas, which added 26,500 jobs. Pennsylvania came in second (+20,900), followed by Florida (+18,100). Meanwhile, a total of 33,900 jobs were lost across 12 states, with California reporting the steepest job losses at 11,600. In percentage terms, employment increased the highest in Missouri at 0.5%, while Connecticut saw the biggest decline at 0.3% between February and March.

Year-over-year ending in March, 1.9 million jobs have been added to the labor market, which is a 1.2% increase compared to the March 2024 level. The range of job gains spanned from 300 jobs in the District of Columbia to 192,100 jobs in Texas. Four states lost a total of 34,700 jobs in the past 12 months, with Iowa reporting the steepest job losses at 11,800. In percentage terms, the range of job growth spanned 2.6% in Idaho to 0.1% in Colorado. The District of Columbia was unchanged while West Virginia, Massachusetts, Arizona, and Iowa declined by 0.3%, 0.3%, 0.3%, and 0.7% respectively.

Construction Employment

Across the nation, construction sector jobs data —which includes both residential and non-residential construction—showed that 30 states reported an increase in March compared to February, while 17 states and the District of Columbia lost construction sector jobs. The three remaining states reported no change on a month-over-month basis. Texas, with the highest increase, added 8,500 construction jobs, while California, on the other end of the spectrum, lost 3,700 jobs. Overall, the construction industry added a net 13,000 jobs in March compared to the previous month. In percentage terms, Kentucky reported the highest increase at 3.6% and Mississippi reported the largest decline at 3.4%.

Year-over-year, construction sector jobs in the U.S. increased by 143,000, which is a 1.8% increase compared to the March 2024 level. Texas added 28,700 jobs, which was the largest gain of any state, while California lost 23,400 construction sector jobs. In percentage terms, New Mexico had the highest annual growth rate in the construction sector at 12.0%. Over this period, Washington reported the largest decline of 5.3%.

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U.S. Economy Added 228,000 Jobs in March

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The U.S. job market unexpectedly accelerated in March, while the figures for January and February were revised downward substantially. The unemployment rate ticked up slightly to 4.2% in March, from 4.1% the previous month. This month’s jobs report highlights the continued resilience of the labor market despite sticky inflation, a drop in consumer confidence, mass federal government layoffs, and growing economic uncertainty.

Noticeably, residential construction employment has shown signs of weakness in recent months. In March, the six-month moving average of job gains for residential construction turned negative for the first time since August 2020. It reflects three significant drops in employment: 8,400 jobs in October 2024, 6,700 jobs in January 2025, and 9,800 jobs in March 2025. Additionally, the construction job openings rate has returned to 2019 levels, driven by a slowdown in construction activity.

In March, wage growth slowed. Year-over-year, wages grew at a 3.8% rate, down 0.3 percentage points from a year ago. Wage growth has been outpacing inflation for nearly two years, which typically occurs as productivity increases.

National Employment

According to the Employment Situation Summary reported by the Bureau of Labor Statistics (BLS), total nonfarm payroll employment rose by 228,000 in March, following a downwardly revised increase of 117,000 jobs in February. Since January 2021, the U.S. job market has added jobs for 51 consecutive months, making it the third-longest period of employment expansion on record.

The estimates for the previous two months were revised down. The monthly change in total nonfarm payroll employment for January was revised down by 14,000 from +125,000 to +111,000, while the change for February was revised down by 34,000 from +151,000 to +117,000. Combined, the revisions were 48,000 lower than previously reported.

The unemployment rate rose to 4.2% in March. While the number of employed persons increased by 201,000, the number of unemployed persons increased by 31,000.

Meanwhile, the labor force participation rate—the proportion of the population either looking for a job or already holding a job—rose one percentage point to 62.5%. For people aged between 25 and 54, the participation rate decreased two percentage points to 83.3%. While the overall labor force participation rate remains below its pre-pandemic levels of 63.3% at the beginning of 2020, the rate for people aged between 25 and 54 has been trending down since it peaked at 83.9% last summer.

In March, employment rose in health care (+54,000), social assistance (+24,000), and transportation and warehousing (+23,000). Employment in retail trade also added 24,000 jobs in March, partially reflecting the return of workers from a strike. However, within the government sector, federal government employment saw a decline of 4,000, following a loss of 11,000 jobs in February. The BLS notes that “employees on paid leave or receiving ongoing severance pay are counted as employed in the establishment survey.”

Construction Employment

Employment in the overall construction sector increased by 13,000 in March, following a gain of 14,000 in February. While residential construction saw a decline of 9,800 jobs, non-residential construction employment added 22,300 jobs for the month.

Residential construction employment now stands at 3.4 million in March, broken down as 958,000 builders and 2.4 million residential specialty trade contractors. The six-month moving average of job gains for residential construction was -2,883 a month, mainly reflecting the three months’ job loss over the past six months (October 2024, January 2025 and March 2025). Over the last 12 months, home builders and remodelers added 14,000 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 1,367,600 positions.

In March, the unemployment rate for construction workers declined to 4.3% on a seasonally adjusted basis. The unemployment rate for construction workers has remained at a relatively lower level, after reaching 15.3% in April 2020 due to the housing demand impact of the COVID-19 pandemic.

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Soft Job Openings Estimate for Construction

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After a period of slowing associated with declines for some elements of the residential construction industry, the count of open construction sector jobs remained lower than a year ago, per the February Bureau of Labor Statistics Job Openings and Labor Turnover Survey (JOLTS).

The number of open jobs for the overall economy declined from 7.76 million in January to 7.57 million in February. This is notably smaller than the 8.45 million estimate reported a year ago and reflects a softened aggregate labor market. Previous NAHB analysis indicated that this number had to fall below 8 million on a sustained basis for the Federal Reserve to feel more comfortable about labor market conditions and their potential impacts on inflation. With estimates remaining below 8 million for national job openings, the Fed, in theory, should be able to cut further despite a recent pause. However, tariff proposals may keep the Fed on pause in the coming quarters.

The number of open construction sector jobs increased from a revised 242,000 in January to 264,000 in February. This nonetheless marks a significant reduction of open, unfilled construction jobs than that registered a year ago (429,000) due to a slowing of construction activity because of ongoing elevated interest rates. The chart below notes the recent decline for the construction job openings rate, which is now back to 2019 levels.

The construction job openings rate edged higher to 3.1% in February, significantly down year-over-year from 5%.

The layoff rate in construction stayed low (1.8%) in February. The quits rate was flat at 2% in February.

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People Not in the Labor Force

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According to the U.S. Bureau of Labor Statistics (BLS), people who are neither working nor looking for work are counted as “not in the labor force”. Understanding the size and characteristics of individuals not in the labor force is crucial for a comprehensive assessment of the job market and overall economic health, as it provides insights into potential labor supply and demand issues.

Size

The number of people not in the labor force has been steadily increasing. As of February 2025, data from the BLS indicates that 102.5 million people, aged 16 or older, were not in the labor force. During the COVID-19 pandemic, this figure surged sharply, rising from 95.2 million in February 2020 to a historically high 103.6 million in April 2020. Since then, the number has remained around 100 million, with a noticeable upward trend over the past year.

Characteristics

Data from the 2024 Current Population Survey (CPS) and the Annual Social and Economic Supplement (ASEC) offer valuable insights into why individuals are not in the labor force. The ASEC gathers information on employment and unemployment experienced during the previous calendar year. The data used in this article focus on individuals aged 16 years and older who neither worked nor looked for a job in 2023.

According to the analysis of the data from the 2024 CPS and ASEC, approximately 93.6 million people aged 16 or older were not in the labor force in 2023. Among this group, nearly 39 million (42%) were men, and 54.6 million (58%) were women.

In terms of age distribution, about 49% of those not in the labor force were aged 65 years or older. Additionally, 13% were between the ages of 55 and 64, 21% were between the ages of 25 and 54, and the remaining 17% were aged 24 or younger. Intuitively, people aged 65 years and older represented the largest share of individuals who were not in the labor force.

Regarding educational attainment, 51% of individuals not in the labor force had a high school diploma or lower. Those with some college education made up 24%, while individuals with a bachelor’s degree or higher accounted for 25%.

The racial breakdown of those not in the labor force is as follows: 58.2 million were non-Hispanic white, 15.4 million were Hispanic, 11.7 million were Black, 5.9 million were Asian, and the remaining 2.5 million identified as other races.

Main Reason for Not Working

The group of people not in the labor force is diverse, and the reasons why individuals are not in the labor force vary widely.

In the CPS and ASEC data, the respondents were asked the main reason for not working. The reasons included: ill or disabled, retired, taking care of home or family, going to school, could not find work and other.

In 2023, a total of 93.6 million individuals aged 16 and older neither worked nor looked for work at any time during the year. Among this group, 48.6 million people reported retirement as their main reason for not working. Approximately 14.9 million individuals stated that they were attending school, while 14.7 million cited illness or disability as the main factor. Additionally, 12.7 million people indicated that taking care of home or family was the main reason for not working in 2023. Nearly 1.8 million individuals selected “other reasons,” and roughly 1.0 million cited “could not find work.”

Retirement is the main reason for not working for about half of the individuals not in the labor force in 2023. Among those aged 65 years and older, 91% of individuals in this group cited retirement as the main reason for not working. Overall, about 44% of individuals not in the labor force were due to the self-reported reason of retirement and aged 65 years and older. Individuals in this 44% share are unlikely to return to the labor force.

While an aging population is a major driver behind the growth of individuals not participating in the labor force, other reasons people give for not engaging in the workforce also play an important role.

For individuals aged 16 to 24, the majority cited going to school as the main reason not working in 2023. In other words, for those citing going to school, 87% were between the ages of 16 and 24. Overall, about 14% of the not-in-labor-force population was due to the self-reported reason of going to school and aged 16 to 24. This group is likely to enter the labor force after graduation, although younger individuals will likely replace them in education settings.

Prime-age workers, aged 25 to 54, historically represent a larger share of the labor force compared to other age groups. However, men and women in this age group have different reasons for not working in 2023. More than half of women (62%) reported taking care of home or family as the main reason for not working, while 48% of men cited illness or disability as their primary reason.

Among prime-age individuals, those with less education were more likely to be out of the labor force than their more educated counterparts. In 2023, 15% of prime-age men with a high school diploma or less were not in the labor force, compared to 10% of those with some college and 5% of those with a bachelor’s degree or higher. The trend was similar among prime-age women, with 33% of those with a high school diploma or less not in the labor force, compared to 20% of those with some college and 13% of those with a bachelor’s degree or more.

It is difficult to predict with certainty whether prime-age individuals currently not in the labor force will enter it. However, several factors could encourage individuals to enter or return to the labor market, including improved economic conditions, the availability of remote work, workplace policies, and retraining opportunities.

Last, based on the CPS and ASEC data, only a small proportion of the remaining population reported the main reasons for not working were that they could not find work and other reasons.

Conclusion

These numbers highlight both challenges and opportunities in expanding the labor force to support construction employment. According to the BLS’s monthly job report, approximately 6% of individuals currently not in the labor force and aged 16 to 64 could potentially be recruited into the workforce. Furthermore, the construction labor force is aging. The building industry must recruit the next generation of workers as industry activity grows in the years ahead, given the growth in population not in the labor force.

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Home Building Employment across States and Congressional Districts in 2023

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As the number of housing units under construction peaked in 2023, the industry set another record employing close to 11.4 million people, including self-employed workers. NAHB estimates that out of this total, 4.7 million people worked in residential construction, accounting for 2.9% of the U.S. employed civilian labor force. Home building in the Mountain Division, as well as in Vermont and Florida, stand out as generating a significantly higher share of local jobs, with residential construction generating more than 5% of all jobs in Idaho and Montana. NAHB’s analysis also identifies congressional districts where home building accounts for particularly high employment levels and share of local jobs.

Not surprisingly, the most populous state—California—also has the most residential construction workers. Over 640,000 California residents worked in home building in 2023, accounting for 3.4% of the state employed labor force.

Fast-growing Florida comes in second with 468,000 residential construction workers. The state stands out for registering one of the fastest growing populations since the start of the pandemic, which undoubtedly boosted housing and construction workforce demand. Florida’s large stock of vacation and seasonal housing further boosts demand for residential construction workers. As a result, in Florida, residential construction workers account for a relatively high 4.4% of the employed labor. Even though this share is well above the national average (2.9%), it is significantly lower than in 2006, when Florida registered the highest share among all 50 states and the District of Columbia, at 6.5%.

Similar to Florida, fast-growing states with a high prevalence of seasonal, vacation homes top the list of states with the highest share of residential construction workers in 2023. Three states in the Mountain Division – Idaho, Montana, and Utah – take the top spots on the list with 5.5%, 5.1% and 4.9% of the employed labor force working in home building. Vermont is next on the list with a share of 4.6%.  

As of 2023, the average congressional district has about 10,800 residents working in residential construction, but that number is often significantly higher. In Idaho’s 1st Congressional District, over 30,000 residents are in home building and Utah’s 2nd Congressional District has over 25,000 residents working in home building. 

Eight other congressional districts have over 20,000 residents working in residential construction – Florida’s 26th, Utah’s 4th, Idaho’s 2nd, Florida’s 17th, Arizona’s 3rd, Utah’s 1st, Florida’s 28th, and California’s 29th. 

By design, Congressional districts are drawn to represent roughly the same number of people. So generally, large numbers of residential construction (RC) workers translate into high shares of RC workers in their district employed labor forces.  Idaho’s 1st tops this list as well, registering the highest share of residential construction workers in the employed labor force, 6.4%. Florida’s 17th is a close second with 6.3% of the district labor force employed in home building. Next on the list are two Mountain division districts – Montana’s 1st and Utah’s 2nd – with shares of 5.8%, followed by two Florida’s districts – 19th (5.7%) and 26th (5.6%). California’s 29th (5.4%) and 39th (5.3%) also register shares far exceeding the national average of 2.9%.   

At the other end of the spectrum there are several districts that contain parts of large urban areas: the District of Columbia, the 12th of New York, located in New York City, Pennsylvania’s 3rd that includes areas of the city of Philadelphia, Georgia’s 5th that includes most of Atlanta, and among others, Illinois’s 7th and 9th, covering parts of Chicago. Most residents in these urban districts tend to work in professional, scientific, and technical services. The District of Columbia stands out for having the lowest number of RC workers, with just 1,400 residing in the district. At the same time, it has a disproportionally large share of public administration workers. The 12th District of New York and the 7th District of Illinois are home to a very large group of finance and insurance workers. Meanwhile, in Pennsylvania’s 2nd, more than a third of residents work in health care and educational services. 

The NAHB residential construction employment estimates include self-employed workers. Counting self-employed is particularly important in the home building industry since they traditionally make up a larger share of the labor force than in the U.S. total workforce.  

The new NAHB home building employment estimates only include workers directly employed by the industry and do not count jobs created in related industries– such as design and architecture, furniture making, building materials, landscaping, etc.  As a result, the estimates underestimate the overall impact of home building on local employment. 

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State-Level Employment Situation: January 2025

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Nonfarm payroll employment increased in 31 states in January compared to the previous month, while it decreased in 19 states and the District of Columbia. California reported no change during this time. According to the Bureau of Labor Statistics, nationwide total nonfarm payroll employment increased by 125,000 in January following a gain of 323,000 jobs in December.

On a month-over-month basis, employment data was most favorable in Texas, which added 27,900 jobs. New York came in second (+20,100), followed by Florida (+16,500). Meanwhile, a total of 101,100 jobs were lost across 19 states and the District of Columbia, with Georgia reporting the steepest job losses at 28,200. In percentage terms, employment increased the highest in South Dakota at 0.5%, while Missouri saw the biggest decline at 0.6% between December and January.

Year-over-year ending in January, 2.0 million jobs have been added to the labor market, which is a 1.3% increase compared to the January 2024 level. The range of job gains spanned from 400 jobs in Massachusetts to 187,700 jobs in Texas across 48 states. Two states and the District of Columbia lost a total of 14,800 jobs in the past 12 months, with Arizona reporting the steepest job losses at 10,200. In percentage terms, the range of job growth spanned 2.8% in Alaska to 0.1% in California. Massachusetts was unchanged while District of Columbia, Arizona, and West Virginia declined by 0.1%, 0.3%, 0.5% respectively.

Construction Employment

Across the nation, construction sector jobs data —which includes both residential and non-residential construction—showed that 23 states reported an increase in January compared to December, while 21 states lost construction sector jobs. The six remaining states and the District of Columbia reported no change on a month-over-month basis. Utah, with the highest increase, added 3,300 construction jobs, while Florida, on the other end of the spectrum, lost 5,100 jobs. Overall, the construction industry added a net 2,000 jobs in January compared to the previous month. In percentage terms, Idaho reported the highest increase at 4.0% and Arkansas reported the largest decline at 1.6%.

Year-over-year, construction sector jobs in the U.S. increased by 178,000, which is a 2.2% increase compared to the January 2024 level. Texas added 19,800 jobs, which was the largest gain of any state, while California lost 27,600 construction sector jobs. In percentage terms, Idaho had the highest annual growth rate in the construction sector at 11.1%. Over this period, Massachusetts reported the largest decline of 3.9%.

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Year-over-Year Declines for Construction Job Openings

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After a period of slowing associated with declines for some elements of the residential construction industry, the count of open construction sector jobs remained lower than a year ago, per the January Bureau of Labor Statistics Job Openings and Labor Turnover Survey (JOLTS).

The number of open jobs for the overall economy increased from 7.51 million in December to 7.74 million in January. This is notably smaller than the 8.47 million estimate reported a year ago and reflects a softened aggregate labor market. Previous NAHB analysis indicated that this number had to fall below 8 million on a sustained basis for the Federal Reserve to feel more comfortable about labor market conditions and their potential impacts on inflation. With estimates remaining below 8 million for national job openings, the Fed in theory should be able to cut further despite a recent pause. However, tariff proposals may keep the Fed on pause in the coming quarters.

The number of open construction sector jobs increased from a revised 205,000 in December to 236,000 in January. This nonetheless marks a significant reduction of open, unfilled construction jobs than that registered a year ago (407,000) due to a slowing of construction activity because of ongoing elevated interest rates.

The construction job openings rate edged higher to 2.8% in January, significantly down year-over-year from 4.8%.

The layoff rate in construction stayed low (1.8%) in January. The quits rate moved higher to 2% in January, near to its rate from a year ago.

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Solid Job Gains in February

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The U.S. job market continued to grow at a solid pace in February, with the unemployment rate edging up slightly to 4.1%. The labor market remains healthy overall, but there are signs of potential weakness in the coming months, driven by mass federal government layoffs and ongoing policy uncertainty.

This month’s jobs report may not fully reflect the impact of these layoffs in both the federal government and private sector, as the reference period for the monthly jobs report only covers the pay period that includes the 12th of the month. In fact, government job losses totaled only 10,000 workers for the February report.

In February, wage growth accelerated. Year-over-year, wages grew at a 4.0% rate, down 0.1 percentage points from a year ago. Wage growth has been outpacing inflation for nearly two years, which typically occurs as productivity increases.

National Employment

According to the Employment Situation Summary reported by the Bureau of Labor Statistics (BLS), total nonfarm payroll employment rose by 151,000 in February, following a downwardly revised increase of 125,000 jobs in January. Since January 2021, the U.S. job market has added jobs for 50 consecutive months, making it the third-longest period of employment expansion on record.

The estimates for the previous two months were revised. The monthly change in total nonfarm payroll employment for December was revised up by 16,000 from +307,000 to +323,000, while the change for January was revised down by 18,000 from +143,000 to +125,000. Combined, the revisions were 2,000 lower than previously reported.

The unemployment rate rose to 4.1% in February. While the number of employed persons decreased by 588,000, the number of unemployed persons increased by 203,000.

Meanwhile, the labor force participation rate—the proportion of the population either looking for a job or already holding a job—decreased two percentage points to 62.4%. For people aged between 25 and 54, the participation rate remained unchanged, at 83.5%. While the overall labor force participation rate remains below its pre-pandemic levels of 63.3% at the beginning of 2020, the rate for people aged between 25 and 54 exceeds the pre-pandemic level of 83.1%.

In February, employment rose in several sectors, including health care (+52,000), financial activities (+21,000), transportation and warehousing (+18,000), and social assistance (+11,000). However, within the government sector, federal government employment saw a decline of 10,000, marking the worst month of federal government net hiring since June 2022.

Construction Employment

Employment in the overall construction sector increased by 19,000 in February, after a 2,000 gain in January. While residential construction gained 12,700 jobs, non-residential construction employment added 6,200 jobs for the month.

Residential construction employment now stands at 3.4 million in February, broken down as 955,000 builders and 2.4 million residential specialty trade contractors. The 6-month moving average of job gains for residential construction was 2,600 a month. Over the last 12 months, home builders and remodelers added 50,500 jobs on a net basis. Since the low point following the Great Recession, residential construction has gained 1,387,000 positions.

In February, the unemployment rate for construction workers rose to 5.3% on a seasonally adjusted basis. The unemployment rate for construction workers has remained at a relatively lower level, after reaching 15.3% in April 2020 due to the housing demand impact of the COVID-19 pandemic.

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Construction Self-Employment Stable at 23%

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The share of self-employed in construction remains just under 23%, a new post-pandemic norm. While this is significantly higher than an economy-wide average of 10% of the employed labor force, for construction, these rates are historically low. Across the nation, construction self-employment rates range from 38% in Maine to 13% in Nevada.

As of 2023, close to 2.6 million of workers employed in construction are self-employed, according to the latest American Community Survey (ACS). While the industry’s payroll employment surpassed the historic highs of the home building boom of the mid-2000s, the number of self-employed remains below the peak of 2006 when over a quarter of the construction labor force was self-employed.

Declining self-employment rates in construction coincide with the declining share of tradesmen in construction and potentially reflect structural changes in the construction labor force, such as a shift towards larger construction firms that are better equipped to invest into new technologies and absorb higher overhead costs.

Partially, the downward trend in construction self-employment rates since the Housing Bust reflects the counter-cyclical nature of self-employment. Under normal circumstances, self-employment rates rise during an economic downturn and fall during an expansion. This presumably reflects a common practice among builders to downsize payrolls when construction activity is declining. In contrast, builders and trade contractors offer better terms for employment and attract a larger pool of laborers to be employees rather than self-employed when workflow is steady and rising.   Potentially reflecting the counter-cyclical nature of construction self-employment, the current self-employment rates are 3.4 percentage points lower compared to the peak rate of the Great Recession.

For similar reasons, persistent labor shortages that plagued the industry during the last decade likely have contributed to the decline in self-employment rates. Ostensibly, to minimize construction delays, builders and trade contractors would be willing to offer better payroll terms to secure employees when finding experienced craftsmen is a challenge.

Since the 2020 ACS data are not reliable due to the data collection issues experienced during the early lockdown stages of the pandemic, we can only compare the pre-pandemic 2019 and post-pandemic 2021-2022 data (hence the omitted 2020 data in the charts above). As a result, it is not clear what accounted for the post-pandemic bump in self-employment. One answer is that   self-employed workers in construction managed to remain employed during the short COVID-19 recession or recovered their jobs faster afterwards, compared to private payroll workers. Another possibility is that the booming residential construction sector attracted self-employed workers from other more vulnerable or slow recovering industries, including commercial construction.

Examining cross-state variation provides additional insights into construction self-employment rates. The New England states and Montana register some of the highest self-employment shares. In Maine, 38% of construction workers are self-employed. The share is similarly high in Vermont where more than a third of workers are self-employed, 36%. In Connecticut and Rhode Island, 28% of workers are self-employed. In Montana, the share is 30%.

The New England states are where it takes longer to build a house.  Because of the short construction season and longer times to complete a project, specialty trade contractors in these states have fewer workers on their payrolls. The 2022 Economic Census data show that specialty trade contractors in Vermont and Maine have some of the smallest payrolls in the nation with five workers on average. Only contractors in Montana have smaller payrolls, averaging less than 5 workers. At the same time, the national average is over nine workers. As a result, independent entrepreneurs in New England and Montana tend to complete a greater share of work, which helps explain the high self-employment shares in these states.

The Mountain division has states with the highest and lowest self-employment rates simultaneously. Montana and Colorado, where more than a quarter of workers are self-employed, round up the list of states with the highest self-employment rates. At the same time, Nevada registers one of the lowest (13%) self-employment rates in construction and takes the place at the opposite end of the list. Only Washington, DC has a lower share of self-employed, 9%. The substantial differences likely reflect a predominance of home building in Montana and Colorado and a higher prevalence of commercial construction, that has larger payroll employment and, presumably, relies less heavily on self-employed.

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This article was originally published by a eyeonhousing.org . Read the Original article here. .

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