Six years after the Great Recession began at the end of 2007, the United States still has fewer jobs than it did then.
That would not be the case but for the unprecedented collapse — and slow recovery — of the construction industry.
Outside construction, there were 130,914,000 jobs in the United States in November, according to the Bureau of Labor Statistics, up 334,000, or 0.3 percent, from the prerecession peak.
But construction employment, which peaked at 7,476,000 in the spring of 2006, was down 30 percent, to 5,435,000, by the time it hit bottom in January 2011. Since then, only a fifth of the jobs lost have been recovered, and construction employment stands at 5,851,000.
During the decline, construction’s share of total employment fell from 5.6 percent — the highest since 1959 — to a low of 4.2 percent. That was the lowest figure recorded since World War II. It has since edged back to 4.3 percent.
As a result, the economy now has 1,291,000 fewer jobs than it did at the peak, in January 2008. With employment gains averaging nearly 200,000 a month over the past year, that implies that the number of jobs in the economy is likely to exceed the old record in June — almost 6½ years later. Before this, it never took as much as four years for the number of jobs to return to the previous peak, at least since the job figures began to be collected in 1939.
Construction hiring has not always been a leader in bringing the country out of recession, although it played that role in the mid-1980s. But it had never been such a continuing drag as it has been in the current cycle.
There has been some recovery in building, but from very low levels. The latest available figures show that construction began on 604,000 single-family homes in the most recent 12 months. That is only a few thousand more than the low reached during the 1981-83 recession, when sky-high interest rates meant that few could afford to buy homes.
The three longest and most severe slides in construction employment since 1960, before the current one, ended with employment in the field down 15 to 18 percent. In each case, construction employment had fully recovered well before this much time had passed. But now, more than seven years after the peak, construction employment is still 24 percent below peak levels.
As a result, construction continues to be a drag on economic growth and employment. Before the crisis, construction — both residential and nonresidential — accounted for 9.4 percent of the nation’s gross domestic product, the highest proportion in nearly 30 years. It plunged to half that level in 2011 and has now recovered only to 6 percent. It was never that low before the Great Recession, at least since 1947, when the figures began to be calculated.