One reason for weakness in the labor market can be attributed to the lack of growth in the construction sector, according to a new report from the Federal Reserve Bank of St. Louis.
Prior to the Great Recession, the hours worked at jobs in the construction sector were seeing an upward trend, and the industry was booming. However, during the recession, the industry was hit particularly hard, and hours worked fell far below pre-recession levels. The report, released last week, highlighted that while many sectors have recovered, the construction sector has not. The report concluded that, “If there is some slack in the labor market, it is likely attributable to the performance of the construction sector and related activities.”
The Department of Transportation (DOT) projects the Highway Trust Fund to reach critically low levels this summer. If that happens, DOT would delay reimbursements to states, which pay for construction projects across the country. If states aren’t able to enter into new construction contracts because of a Highway Trust Fund crisis, as many as 700,000 jobs could be at risk, according to DOT estimates. Senator Murray has called on Congress to avoid a crisis that would jeopardize thousands of important transportation projects, and have a serious impact on construction jobs. In a recent speech on the Senate floor, Murray said, “Allowing the Highway Trust Fund to reach critically low levels would be another blow to an industry that’s already seen more than its fair share of job loss and uncertainty.”
Read more about how the Highway Trust Fund works here.