KEY POINTS
-
Initial jobless claims and unemployment remain low, but BLS surveys show lukewarm total employment growth.
-
February's CPI held at a modest up 2.4% year-over-year thanks to falling gas prices. But, surging oil costs from the U.S.-Iran conflict in the Strait of Hormuz may reverse that trend.
-
Incoming Fed Chair Kevin Warsh faces three potentially conflicting priorities.
Barring unforeseen circumstances, Kevin Warsh will soon replace Jerome Powell as Chairman of the Federal Reserve. Mr. Powell's term ends May 15th, but Mr. Warsh must first clear Senate confirmation. Once seated, he will confront a tricky economic landscape.
Mainly through interest rates, the Fed prioritizes two mandates: keeping inflation in check and promoting jobs growth.
Examining the Employment Situation
The most upbeat news, the report for initial jobless claims remained remarkably low at 202,000 for the week ending March 28, 2026. The past year's highest was 259,000 in early September 2025. A figure below 300,000 speaks of a tight labor market, confirmed by the unemployment rate of 4.3%, barely above last year's 4.2%.
There is more to the story, however. The BLS household survey showed a March decline in total employment year over year of 661,000 jobs (down 0.4%). The employer survey recorded a gain of 260,000 (up 0.2%). Both decidedly lukewarm.
For construction, total jobs changed year-over-year by +57,000 (+0.7%): residential building, -3,900 (-0.4%); non-residential building, +17,200 (+1.9%); heavy and civil engineering, +24,300 (+2.1%); and subtrades, +19,500 (+0.4%). Manufacturing jobs were -75,000 (-0.6%).
More worrying, though, is the February 2026 JOLTS report. Total non-farm job openings are down 44% from their March 2021 peak. Construction openings are down 56% from March 2022; manufacturing, down 57% versus April 2022. Present levels hark back to 2019, 2017, and 2018 — more than a half decade ago.
Setting aside COVID-era amplitudes, total hires are down 30% versus their November 2021 peak; construction hires, down 44% versus October 2019; manufacturing hires, down 45% versus March 2022. Adding to stress are myriad reports, especially from high tech, of layoffs from rapid adoption of artificial intelligence.
Present and Expected Inflation
February 2026's All-items Consumer Price Index was a decently modest up 2.4% year-over-year. Some line items showed more volatility: food away from home, up 3.1%; electricity, up 4.8%; piped gas services, up 10.9%. The overall number stayed low thanks to gasoline at down 5.6% year-over-year.
That fortuitous reading is about to be overturned. The bottleneck in world oil deliveries created in the Strait of Hormuz by the U.S.-Iran conflict has sent crude soaring. Brent crude hovers around $110 per barrel and the average gallon of gas across America has risen above $4.00.
The inflationary fallout extends beyond the pump. It impacts commercial supply routes relying on diesel, drives up airline costs via jet fuel, and will lift grocery prices through escalating natural gas costs for fertilizer production.
Rather than an overheating economy, these inflation boosts result from armed conflict and tariff hikes, rendering the Fed's usual weaponry of higher interest rates much less effective.
The employment situation is stable at best, and inflation is almost certainly heating up again. Complicating matters, the President has another mandate he would like the Fed to assume — supporting stock market strength, which implies low interest rates.
Three possibly conflicting priorities. Bottom line? The new Federal Reserve Chairman, Kevin Warsh, will have lots of opportunity to prove his mettle.
About ConstructConnect
At ConstructConnect, our software solutions provide the information construction professionals need to start every project on a solid foundation. For more than 100 years, our keen insights and market intelligence have empowered commercial firms, building product manufacturers, trade contractors, and architects to make data-driven decisions, streamline preconstruction workflows, and maximize their productivity. Our newest offerings—including our comprehensive, AI-assisted software—help our clients find, bid on, and win more projects.
ConstructConnect operates as a business unit of Roper Technologies (Nasdaq: ROP), a constituent of the Nasdaq 100, S&P 500, and Fortune 1000.
For more information, visit constructconnect.com
