HispanicBusiness

Amid a general sharp downturn in U.S. employment in September, the construction sector was especially hard hit. According to the latest Labor Department jobs report, the American economy saw 159,000 jobs disappear in September, while construction sector fell 35,000, accounting for more than one fifth of the lost jobs.

"All types of construction shed workers in September, following an uptick in nonresidential hiring in August," noted Ken Simonson, head economist for the Associated General Contractors of America (AGC).

In addition to construction, manufacturing and retail also saw a decline in employment, while mining and health care continued to hire new workers.

September's job report was the worst in five years, and over the last year, 1.1 million jobs have been eliminated. Since September 2007, construction in particular has lost 760,000 jobs, dropping from 9.5 million to 8.74 million employed workers.

According to Simonson, "The bad news on employment comes on the heels of a report from the Census Bureau on Wednesday that private nonresidential construction spending fell by nearly 1 percent in both July and August."

Local and state government, however, offered a less dismal picture, with increased expenditures on infrastructure and school construction. Mr. Simonson moderated that positive picture, stating that he feared government construction outlays will decline "as more states each week announce budget shortfalls. Highways and schools--60 percent of public construction spending--are in particular jeopardy, because of drops in fuel and property taxes."

In addition, the September job figures do not reflect the turmoil in the financial sector in recent weeks. Tightening credit, especially among small businesses, is having a cascading impact that could portend worsening employment in construction.

"It's a dismal report and the worst thing about it is that it does not reflect the recent seizure that we've seen in the credit markets," said Michael T. Darda, chief economist at MKM Partners, a research and trading firm in Greenwich, Conn. "We've lost jobs in nearly every area of the economy, and this is going to worse before it gets better because the credit markets have deteriorated basically on a daily basis for the last few weeks."