The U.S. construction unemployment rate rose modestly in September 2025, according to a new state-by-state analysis of Bureau of Labor Statistics data released by Associated Builders and Contractors.
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The national, not seasonally adjusted construction unemployment rate stood at 3.8% in September, marking a slight increase compared to the same month in 2024. Despite the uptick, ABC reported that every state recorded construction unemployment below 10%, underscoring continued demand for construction labor nationwide.
ABC’s analysis found that construction unemployment rates declined in 26 states year over year, while 21 states saw increases. Three states — Alaska, California and Texas — reported unchanged rates during the period.
The data release follows the conclusion of the longest government shutdown on record, which lasted 43 days and temporarily halted federal economic reporting. ABC noted that, because of the shutdown, October construction labor data will not be available, as the BLS was unable to collect the necessary information.
Construction payroll employment continued to show year-over-year growth, though at a slower pace. National nonseasonally adjusted construction payroll employment increased by 33,000 jobs compared with September 2024. Seasonally adjusted construction employment reached 8.3 million workers, a level that is 9.1% higher than the industry’s pre-pandemic peak of 7.6 million.
However, ABC emphasized that hiring momentum is easing. September marked the third consecutive month in which year-over-year construction employment gains fell below 100,000, following more than four years of six-figure annual increases.
“Higher building materials costs due to tariffs, higher insurance costs and rising labor costs along with a shortage of skilled construction workers are weighing upon the construction industry,” says Bernard Markstein, president and chief economist of Markstein Advisors, who conducted the analysis for ABC. “On the positive side, a somewhat easier policy stance by the Federal Reserve has resulted in lower interest rates. Further declines in interest rates are likely in 2026.”
At the state level, estimated construction unemployment rates were below pre-pandemic levels in roughly 40% of states. As of September, 21 states posted lower construction unemployment rates compared with September 2019, while 27 states recorded higher rates. Arkansas and Washington reported rates that were unchanged from their pre-pandemic levels.
Month over month, construction unemployment rose sharply nationwide. The national NSA construction unemployment rate increased by 0.6 percentage points from August to September. Only Iowa and Utah experienced month-over-month declines, while 46 states posted increases. Hawaii and Ohio reported no change.
New Jersey recorded the highest estimated construction unemployment rate in September at 9.4%, followed by Rhode Island at 7.5% and Connecticut at 6.7%. Minnesota and Montana tied at 5.9%.
At the low end, Oklahoma reported a construction unemployment rate of 1.4%, followed by Hawaii at 1.7% and New Hampshire at 2%. Georgia, Indiana and Tennessee each posted rates of 2.2%.
Several states achieved notable milestones in September. Oklahoma, Hawaii and Indiana each recorded their lowest estimated September construction unemployment rates on record. Hawaii also posted the largest year-over-year decline, dropping 1.2 percentage points, alongside Illinois, Kentucky and Louisiana.
Tennessee reported its second-lowest September construction unemployment rate on record, trailing only the 2.1% levels reached in September 2021 and 2022.
Originally reported by Chris Sweeney, Managing Editor in CD Recycler.
