America’s Hot Labour Market Fuels Job Growth in Unexpected Places
Payroll increase extends to building, home selling and auto making
3 min
The U.S. labor market is showing surprising pockets of strength as companies directly in the crosshairs of rising interest rates hold on to or add workers.
Builders, architects and engineers, real-estate agents, vehicle manufacturers and other businesses typically sensitive to higher borrowing costs have increased employment during the opening months of 2023.
Those job gains, along with much larger increases in industries still trying to claw back workers lost during the pandemic, have added up to almost 1.6 million jobs in the first five months of 2023, outpacing economists’ forecasts.
The Labor Department will release June jobs figures on Friday.
“The labor market has continually surprised,” said Daniel Zhao, lead economist for the research team at Glassdoor, an online employment site.
Robust hiring defies theFederal Reserve
The strong job gains come despite companies and consumers facing higher borrowing costs.
The Federal Reserve raised interest rates to a 16-year high in 2023. And it is expected to increase them further later this year as part of a campaign to slow the economy, cool the labor market and tamp down inflation that is running too hot.
Some industries are defying the Fed’s efforts.
Construction employment has been one of the biggest surprises in recent months. In the past, builders have been hit especially hard when interest rates rose.
But employment in residential construction has merely levelled off in 2023, while industrial and infrastructure businesses gallop ahead.
Projects related to electric-vehicle batteries and semiconductors are driving much of the growth, spurred in part by the Chips and Science Act of 2022, which set aside $52.7 billion for financial assistance for the construction and expansion of semiconductor manufacturing facilities and other programs.
“Many of these were announced or broke ground before the Chips Act, but that added fuel to the bonfire,” said Kenneth Simonson, chief economist at Associated General Contractors of America.
Architectural and engineering firms have also added workers. The real-estate industry hasn’t shed any jobs this year despite a slowdown in single-family home sales.
American factories also often get caught in the Fed’s crosshairs when costs go up for auto loans and other personal loans. But auto and parts manufacturers have added almost 20,000 workers so far in 2023, helping to offset losses at makers of furniture, plastics and paper products.
According to Commerce Department data, car sales are still below pre pandemic levels, held back by limited supplies and high prices. But figures from the Fed show factories are trying to catch up. Auto and light-truck assemblies were above an annual pace of 11 million in April and May, the first time that number has been topped in back-to-back months since 2018.
Some employers stabilise, others heat up
The story is similar in other corners of the economy. Home-improvement and furniture stores have shed workers, for example, but department stores and warehouse clubs have added them. The final result: Overall retail employment has grown slightly so far this year.
The financial sector has also posted growth despite banking sector turmoil, with gains at insurers, brokers and financial advisers outpacing losses in banking.
Other sectors aren’t merely holding up—they are rapidly hiring. Government, leisure and hospitality and healthcare account for about 60% of all employment gains so far in 2023. The first two categories are still playing Covid-19 catch-up: Employment at restaurants, hotels, schools and in other municipal services are still below pre pandemic levels.
The picture isn’t entirely rosy.
Tech layoffs are well documented. Some economists worry that residential construction employment could be headed for a fall as a big run-up in apartment projects leads to an oversupply of units and signs of falling rents.
The number of hours people are spending on the job is declining, a possible sign that employers have less work for them. Wage growth remains strong but has eased, suggesting that demand for workers is cooling. And job growth has become more concentrated in fewer industries, possibly indicating that the breadth of the economic expansion is also narrowing.
“There are signals on the periphery that the labor market is slowing,” said Brett Ryan, senior U.S. economist at Deutsche Bank.
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Consumers are going to gravitate toward applications powered by the buzzy new technology, analyst Michael Wolf predicts
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Couples find that lab-grown diamonds make it cheaper to get engaged or upgrade to a bigger ring. But there are rocky moments.
4 min
Wedding planner Sterling Boulet has some advice for brides-to-be regarding lab-grown diamonds, which cost a fraction of the natural ones.
“If you’re trying to get your man to propose, they’ll propose faster if you offer this as an option,” says Boulet, of Raleigh, N.C. Recently, she adds, a friend’s fiancé “thanked me the next three times I saw him” for telling him about the cheaper lab-made option.
Man-made diamonds are catching on, despite some lingering stigma. This year was the first time that sales of lab-made and natural mined loose diamonds, primarily used as center stones in engagement rings, were split evenly, according to data from Tenoris, a jewellery and diamond trend-analytics company.
The rise of lab-made stones, however, is bringing up quirks alongside the perks. Now that blingier engagement rings—above two or three carats—are more affordable, more people are dealing with the peculiarities of wearing rather large rocks.
Esther Hare, a 5-foot-11-inch former triathlete, sought out a 4.5-carat lab-made oval-shaped diamond to fit her larger hands as a part of her vow renewal in Hawaii last year. It was a far cry from the half-carat ring her husband proposed with more than 25 years ago and the 1.5-carat upgrade they purchased 10 years ago. Hare, 50, who lives in San Jose, Calif., and works in high tech, chose a $40,000 lab-made diamond because “it’s nuts” to have to spend $100,000 on a natural stone. “It had to be big—that was my vision,” she says.
But the size of the ring has made it less practical at times. She doesn’t wear it for athletic training and swaps in her wedding band instead. And she is careful to leave it at home when traveling. “A lot of times I won’t take it on vacation because it’s just a monster,” she says.
The average retail price for a one-carat lab-made loose diamond decreased to $1,426 this year from $3,039 in 2020, according to the Tenoris data. Similar-sized loose natural diamonds cost $5,426 this year, compared with $4,943 in 2020.
Lab-made diamonds have essentially the same chemical makeup as natural ones, and look the same, unless viewed through sophisticated equipment that gauges the characteristics of emitted light.
At Ritani, an online jewellery retailer, lab-made diamond sales make up about 70% of the diamonds sold, up from roughly 30% two years ago, says Juliet Gomes, head of customer service at the company, based in White Plains, N.Y.
Ritani sometimes records videos of the lab-diamonds pinging when exposed to a “diamond tester,” a tool that judges authenticity, to show customers that the man-made rocks behave the same as natural ones. “We definitely have some deep conversations with them,” Gomes says.
Not all gem dealers are rolling with these stones.
Philadelphia jeweller Steven Singer only stocks the natural stuff in his store and is planning a February campaign to give about 1,000 one-carat lab-made diamonds away free to prove they are “worthless.” Anyone can sign up online and get one in the mail; even shipping is free. “I’m not selling Frankensteins that were built in a lab,” Singer says.
Some brides are turned off by the larger bling now allowed by the lower prices.When her now-husband proposed with a two-carat lab-grown engagement ring, Tiffany Buchert, 40, was excited about the prospect of marriage—but not about the size of the diamond, which she says struck her as “costume jewellery-ish.”
“I said yes in the moment, of course, I didn’t want it to be weird,” says the physician assistant from West Chester, Pa.
But within weeks, she says, she fessed up, telling her fiancé: “I think I hate this ring.”
The couple returned it and then bought a one-carat natural diamond for more than double the price.
When Boulet, the wedding planner in Raleigh, got engaged herself, she was over the moon when her fiancé proposed with a 2.3 carat lab-made diamond ring. “It’s very shiny, we were almost worried it was too shiny and was going to look fake,” she says.
It doesn’t, which presents another issue—looking like someone who really shelled out for jewellery. Boulet will occasionally volunteer that her diamond ring came from a lab.
“I don’t want people to think I’m putting on airs, or trying to be flashier than I am,” she says.
For Daniel Teoh, a 36-year-old software engineer outside of Detroit, buying a cheaper lab-made diamond for his fiancée meant extra room in his $30,000 ring budget.
Instead of a bigger ring, he got her something they could both enjoy. During a walk while on an annual ski trip to South Lake Tahoe, Calif., Teoh popped the question and handed his now-wife a handmade wooden box that included a 2.5-carat lab-made diamond ring—and a car key.
She put on the ring, celebrated with both of their sisters and a friend, who was the unofficial photographer of the happy event, and then they drove back to the house. There, she saw a 1965 Mustang GT coupe in Wimbledon white with red stripes and a bow on top.
Looking back, Teoh says, it was still the diamond that made the big first impression.
“It wasn’t until like 15 minutes later she was like ‘so, what’s with this key?’” he adds.
Consumers are going to gravitate toward applications powered by the buzzy new technology, analyst Michael Wolf predicts
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
