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Declining Unemployment Rates Suggest Economic Recovery Despite Lingering Labor Shortage

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Economics

Declining Unemployment Rates Suggest Economic Recovery Despite Lingering Labor Shortage

The construction industry is actively hiring and recruiting, but many more new workers are needed to increase housing supply


December 6, 2021
Construction labor force
Image: Stock.adobe.com

The national unemployment rate dropped four basis points to 4.2% for the month of November with the creation of around 210,000 new jobs, MPA reports. While declining unemployment rates suggest economic recovery post-pandemic, a persistent shortage of workers leaves the construction industry largely short-handed as it combats a nationwide housing shortage. 

Though many more trade workers are needed to boost inventory and cut down housing demand, a higher labor participation rate and increased wages mean that the national economy is inching closer to full employment. 

Around 210,000 new jobs were created in November – smaller than expected, but still a sign that the economy has been recovering, according to MBA chief economist Mike Fratantoni.

More workers are getting off the sidelines as employers boost wages. The labor-force participation rate edged up from 61.6% in October to 61.8% in November as average wages rose 4.8% from November 2020.

Fratantoni stated that the rise in wages and increase in the labor force, coupled with the still-elevated number of job openings, suggest that the economy is getting closer to full employment.

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