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Illustration: Annelise Capossela/Axios

Here’s a surprising detail from Friday's jobs report: America is seeing insatiable building demand, but the sector that most directly benefits is shedding workers.

Why it matters: A material crunch and supply chain mess are holding down job gains.

Driving the news: The construction sector shed 20,000 jobs in May.

  • In April, the industry (on net) added no jobs at all.

What’s happening: Last month’s losses were almost entirely driven by a steep decline of specialty trade contractors. Think roofers, drywallers or pipefitters — specifically those working on commercial projects.

  • "A lot of it could be ... getting [construction] materials on job sites," Labor Secretary Marty Walsh told CNBC Friday.

The big picture: Home prices nationally rose the most since 2005, data out last week showed — a byproduct of strong demand, but not enough supply.

  • Commercial building — particularly for fulfillment or data centers — is heating up too, says Anirban Basu, chief economist at Associated Builders and Contractors, an industry trade group.

But, but, but: Builders are struggling to source crucial materials like lumber, iron and steel — and prices for them have skyrocketed.

How it's playing out: "Projects are being postponed, then, of course, some construction workers are being released from employment," says Basu.

What to watch: Residential construction added a mere 1,900 jobs last month, a slower pace than what the country’s housing boom might suggest, Doug Duncan, Fannie Mae’s chief economist, told Housing Wire.

Go deeper

U.S. unemployment rate falls to 5.8%, a new pandemic low

Photo: Yuri Gripas/Abaca/Bloomberg via Getty Images

The U.S. economy added 559,000 jobs last month, while the unemployment rate fell to 5.8% from 6.1%, the government said on Friday.

Why it matters: Vaxxed America isn't surging back to work as quickly as economists, who had predicted 670,000 new jobs, hoped it would. Still, the total number of jobs in the U.S. rose by a reasonably healthy amount in May — much faster than the anemic growth of 278,000 we saw in April.

Biden on jobs report: Rebooting economy is not like "flipping on a light switch"

President Biden said Friday he remains confident that his economic plans are working and that the U.S. is on the path to a full recovery, following the release of the May jobs report that came in slightly below expectations.

Driving the news: The U.S. economy added 559,000 jobs last month, while the unemployment rate fell to a pandemic-low 5.8%. Biden touted the report as "great news for our economy," while cautioning that "we're going to hit some bumps" along the path to a full recovery.

Jun 4, 2021 - Politics & Policy

May jobs report to frame debate on Biden's spending plans

Photo: Alex Wong/Getty Images

Democrats and Republicans are preparing to seize on today’s jobs numbers to argue for — or against — Biden’s proposal for $4 trillion in infrastructure and social safety net spending.

Why it matters: Like early in the Obama administration, the job report is serving as a monthly assessment of the president's economic policies.