The January 2026 data points released yesterday by the US Bureau of Labor Statistics suggest a mixed but generally resilient environment for small residential design firms.

While “Residential Building Design” isn’t a standalone category in this summary, its primary driver—Construction—added 33,000 jobs in January.

Growth in construction typically signals a pipeline of new projects, although the primary driver appears to be nonresidential specialty trade contractors.

While the residential sector remains stable, this shift suggests a slight pivot in labor availability toward commercial and specialty trades.

Rising Labor Costs:

The report shows that average hourly earnings rose 0.4 percent in January, bringing the annual increase to 3.7 percent.

For a small office, this is critical information for keeping talent. Firms may need to increase compensation by roughly 4% just to keep pace with the market.

Since small firms have less “padding” in their budgets, these incremental raises in wages—and the associated payroll taxes—can tighten profit margins more quickly than they would for a large firm.

If you are looking to hire a 5th person, the market remains tight. With the labor force participation rate holding steady at 62.5%, there isn’t a sudden surge of new available talent, meaning recruitment will remain competitive and likely expensive.

The slight year-over-year increase in unemployment can make residential clients—particularly homeowners—more cautious about pulling the trigger on large-scale renovation or custom-build design contracts.

Source: US Bureau of Labor Statistics