U.S. Jobs Growth Steady in June, Backed by $18 Billion in Industrial Project Starts

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Researched by Industrial Info Resources (Sugar Land, Texas)--During the last three months, the U.S. jobs situation has improved slightly. While the level of job growth has not even come close to pre-recession numbers, it has remained steadily positive. This has not led to a significant decrease in the overall unemployment number, even as the jobs figures for the last several months have been backed by significant industrial construction starts. In June, 195,000 jobs were created in the U.S., which follows 199,000 in April and another 195,000 in May, while industrial construction starts topped the $18 billion mark.

Click on the image at right for a graph detailing U.S. construction starts in June 2013 by industry.

However, the overall unemployment rate in the U.S. has remained relatively unchanged over the past three months at 7.6%. Employment has not improved dramatically this year, with 11.8 million workers without jobs and another 2.6 million marginally attached to the labor force. The unemployment rate has not taken a significant dive in quite some time and is unlikely to do so in the near future. More workers are taking part-time positions for economic reasons in recent months, and thanks to the mandatory sequester cuts, unemployment benefits will begin to decrease in July.

The volatile construction sector saw significant job growth for the month, with 13,000 jobs created, while the manufacturing sector, where the jobs growth needs to be significant, lost 6,000 jobs. About 45,000 new jobs were created in the trade, transportation and utilities sectors, which included 37,100 retail jobs. The professional and business services sector saw 53,000 new jobs, while the education and health services sector grew by 13,000 jobs. The leisure and hospitality sector saw significant growth during the month with 75,000 jobs, thanks largely to 57,400 jobs created in the accommodation and food services sector. Jobs remained scarce in the government arenas, with an overall total of 7,000 lost, mainly at the state government level, which saw 15,000 jobs disappear. Local governments made up for that loss by creating another 13,000 jobs, while the federal government dropped 5,000 jobs.

Industrial spending in the U.S. has remained strong for much of 2013, thanks to the robust efforts of several industries, as well as a relatively mild winter. In June, the Alternative Fuels Industry saw the most sizable construction starts, with 27 capital or maintenance projects worth an estimated $4.2 billion beginning construction. Four other industries each topped the $2.1 billion mark for the month: the Power Industry at $2.2 billion, the Oil & Gas Transmission Industry at $2.1 billion, the Industrial Manufacturing Industry at $2.8 billion and the Pharmaceutical & Biotech Industry at $2.6 billion. Less than $1 billion in total construction starts were seen in the balance of the industries for the month.

The Southwest region of the U.S. has been growing rapidly, with billions being allocated to projects in that region every month. June was no different as the Southwest region saw 111 capital or maintenance projects worth an estimated $4 billion begin construction. The West Coast region, however, did its best to catch up and added $3.2 billion in project starts, while the Southeast region contributed another $3 billion. Five other regions reached the $1 billion plateau in June: the Great Lakes region at $1.9 billion, the Mid-Atlantic region at $1 billion, the Midwest region at $1 billion, the New England region at $1.2 billion and the Rocky Mountain region at $1.8 billion.

Despite solid U.S. industrial spending this year, it has been very difficult to reduce the unemployment rate. The vast majority of the new jobs created in 2013 have come from the private service-providing industry, rather than the goods-producing industry, which reflects a very basic shift in where jobs are since the recession ended. Manufacturers continue to take a much more measured, cautious approach to hiring, and that has led to slower job growth than most would want. With finger-pointing still the focus in Washington D.C., it is unlikely that the country's leadership will be doing much to improve this situation in the near term, which means that job growth should remain steady but slow for the balance of 2013, no matter how much money manufacturers continue to pump into growing their operations in the U.S.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.