Written by: , Chief Economist and , Director of Economic Research at 51ºÚÁÏÂ
The Bottom Line
Total nonfarm payrolls added 57,000 jobs in June, close to the average monthly pace of the past year, and the unemployment rate held at 4.2 percent. Construction payrolls rose by 11,000, a modest gain that masks a widening split beneath the surface: nonresidential building and heavy and civil engineering firms kept adding workers, while residential building lost jobs for the second month in a row. Average hourly earnings in construction climbed 4.3 percent over the year, faster than the economy-wide gain of 3.5 percent, a sign that skilled labor remains tight even as residential hiring cools.
Key Indicators
What the Data Shows
Construction employment stood at 8.33 million in June on a seasonally adjusted basis, up 11,000 from May and up 64,000 from a year earlier. That headline annual growth is roughly consistent with the broader labor market’s pattern of slow but positive growth. The composition of the gain, however, continues to be the more telling part of the release.
Residential building construction shed 2,900 jobs in June after losing 5,600 in May and 2,300 in April, marking its third consecutive monthly decline. Nonresidential building construction added 3,200 jobs, extending gains that have now pushed employment in that subsector well above its year-ago level. Heavy and civil engineering construction also added 2,600 jobs, continuing a steadier upward path that has held through the spring. Specialty trade contractors added 8,400 jobs overall, though that total blends a 5,700 decline among residential specialty trade contractors against a larger gain among nonresidential specialty trade contractors, echoing the same residential-versus-nonresidential split visible in the building subsectors.
Hours and pay tell a complementary story. The average workweek for construction workers held at 39.3 hours in June, unchanged from May and up 0.4 hours from a year earlier, suggesting firms are not yet cutting hours in response to softer residential demand. Average hourly earnings rose to $41.36, up 0.4 percent on the month and 4.3 percent over the year, outpacing the 3.5 percent year-over-year gain for all private-sector workers. Rising pay alongside slowing residential hiring points to a labor market where skilled trades remain scarce even as the mix of work shifts.
Employment indexed to June 2025 = 100, seasonally adjusted, June 2025–June 2026. Blue: nonresidential building construction. Amber: heavy and civil engineering construction. Red dashed: residential building construction. Source: U.S. Bureau of Labor Statistics, Current Employment Statistics, seasonally adjusted (series CES2023610001, CES2023620001, and CES2023700001), through June 2026.
Trend Context
Indexed to June 2025, the divergence over the past year is clear (see chart). Nonresidential building and heavy and civil engineering construction have each climbed to about 102 percent of their June 2025 level, while residential building has slipped to roughly 98.5 percent, easing gradually through the winter before turning sharply lower in the spring. The 12-month figures make the point more forcefully. Over the past year, residential building is down 14,400 jobs —while nonresidential building (+21,200), heavy and civil engineering (+28,300), and specialty trades (+29,300) all gained sharply. This is not a sector that wobbled for a month; it has spent the better part of a year moving hiring out of housing and into commercial, institutional, and infrastructure work, and June simply extends that pattern. The divide runs deeper than the building categories, too: June’s 8,400 specialty-trade gain blends a 5,700 decline in residential specialty trades against a larger nonresidential gain, so the same split shows up whether you look at the firms erecting buildings or the trades finishing them.
The divergence is also playing out against a sharper macro backdrop than in recent quarters. The oil-price shock from the Iran war that began in February 2026 pushed headline inflation to 4.2% in May, its highest in three years, and has kept the Federal Reserve on hold, with markets no longer pricing any rate cuts this year; that higher-for-longer stance bears directly on interest-rate-sensitive residential building and is consistent with housing being the subsector giving ground. The energy shock has also raised diesel, fuel, and materials-related costs across all of construction, while a persistent skilled-labor shortage keeps pushing labor costs higher even in the subsectors that are still hiring. None of these forces are visible in the June payroll counts directly, but together they help explain why the pressure is landing hardest on residential. In other circumstances one might think that residential construction workers might be moving over to non-residential. However, the skill sets are meaningfully different, particularly for the sub-sectors seeing the most growth.
The Infrastructure Leg: Heavy and Civil Engineering
While demand for data center construction is supporting nonresidential construction jobs, the strongest single subsector has been in heavy and civil engineering construction — which includes highways, bridges, utilities, pipelines, power, and site work. It added 28,300 jobs over the past year, more than any of the other construction subsectors, and at 1.21 million workers it’s now the largest of the three. Its climb has also been the steadiest: employment rose from about 1.14 million in January 2024 to 1.21 million in June 2026, a gain of roughly 64,000 (5.6 percent) with only a handful of down months along the way, leaving it essentially at an all-time high.
Where residential building turns on mortgage rates and nonresidential building tracks the commercial and institutional cycle, civil and infrastructure work leans more on multi-year public funding and utility investment. The recent trend points to sustained demand for infrastructure, power, and site-development projects, including work tied to large data centers and semiconductor facilities.
What It Means for Construction
For contractors and staffing planners, the near-term hiring picture looks different depending on the markets a firm is in. Nonresidential and heavy civil contractors are still competing for workers in a market where specialty trade labor is tightening, and the 4.3 percent year-over-year rise in average hourly earnings suggests that competition for skilled crews has not eased. Residential builders, by contrast, appear to have more slack to work with this month, though three straight months of job losses is not yet a long enough run to call a firm trend.
For owners and developers, the earnings data is the number to watch most closely. Wage growth in construction running well above the broader private sector average, points to continued upward pressure on labor costs for projects still in the bidding or early contracting stage, regardless of subsector. Developers planning multifamily or single family projects may find more available crew capacity than they did earlier in the cycle, but they should not assume that translates into lower labor costs, since wage pressures are broad spread.
In the short-run, the construction sector’s overall job gains and wage growth are slightly stronger than the broader private-sector pattern, even as the residential sector is shedding jobs. Industry-level headlines can mask meaningfully different conditions across cohorts, and planning decisions should be grounded in the subsector’s data rather than the top-line construction number alone. While construction may not be playing as big a role as healthcare in keeping the labor market afloat, it certainly is holding its own.
Key Numbers to Watch
Note on data completeness: this table uses only the monthly columns published in the June 2026 Employment Situation release (June 2025, April 2026, May 2026, June 2026). The “average monthly change” figure for total nonfarm payrolls is the 12-month average cited in the release narrative, not a cumulative 12-month change, since the release does not state that figure directly.
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