Hispanics who provided the bulk of the construction work force during the housing boom are suffering as many of those jobs evaporate, according to a new study.

However, there are no signs Hispanics are quitting the U.S. labor market, a strong indication that immigrants are choosing to bear down and hustle for jobs in the U.S. rather than return to their countries of origin.

The seasonally adjusted unemployment rate among Hispanics reached 6.5% in the first quarter of 2008, when the unemployment rate for all non-Hispanics was 4.7%, according to the report by the Pew Hispanic Center, a nonpartisan research organization. The report is based on Pew's analysis of the latest data from the Bureau of Labor Statistics and the Census Bureau, which include both immigrant and native-born Hispanics.

At the end of 2006, when Hispanic unemployment was at a historic low of 4.9%, the gap between Hispanic and non-Hispanic unemployment had shrunk to a low of 0.5 percentage point.

Hispanics mainly lost jobs over the past year due to the slowdown in construction, a longtime mainstay of job growth for Hispanic workers, particularly immigrants. Weekly earnings in construction tumbled to $480 a week in the first quarter of 2008 compared with $512 in the same quarter of 2006. "The economic slowdown led by a single industry has impacted the one group of workers who had benefited most from the construction boom," says Rakesh Kochhar, an economist at Pew Hispanic who prepared the report.

Even as home building stumbled, Hispanics were able to find nearly 300,000 more new construction jobs in the first quarter of 2007 than in the first quarter of 2006. The study suggests that the slowdown has finally caught up with the workers in the last year.

"The latest trends in the labor market represent a dramatic reversal for Latino workers," the report says, adding: "The ongoing slump in construction has wiped out those gains virtually in their entirety."

The Labor Department estimates that 26% of the seven million construction workers in the U.S. are Hispanic, but independent researchers and industry observers believe the actual proportion of Hispanics is significantly higher because many workers are immigrants who are hired off the books.

The construction industry's contraction, coupled with the federal government operations to enforce immigration rules, has made undocumented immigrant workers particularly vulnerable to job loss. The nonseasonally adjusted unemployment rate among foreign-born Hispanics, many of whom are here illegally, jumped to 7.5% in the first quarter of 2008, compared with 5.5% in the first quarter of 2007, according to the Pew Hispanic report. For native-born Hispanics, or Hispanic-Americans, that rate was 6.9% in the first quarter of 2008, up just slightly from 6.7% in 2007.

This also marks the first time since 2003 that a higher percentage of foreign-born than native-born Latinos were unemployed, reflecting immigrants' prominent role in construction. About 20% of immigrant Latinos are employed in the sector, compared with only 8% of native-born Latinos.

Many undocumented workers don't appear on employment rosters because they work as independent contractors or are hired indirectly by big developers through subcontractors or labor brokers who don't officially employ every worker. "They were ghosts to begin with," says Rose Quint, an economist at the National Association of Homebuilders. Thus, she says, "the decline in employment is probably bigger than [payroll] numbers are showing."

John Dewey, a residential developer in the outskirts of Philadelphia, remembers 30 years ago when he joined the construction industry as a carpenter. "When you looked around the site, you saw 100% Americans," he recalls. Surveying a construction site in Coatesville, Pa., where his company is building houses, he said, "If you look around now, 35% to 40% of the work force is recent immigrants."

Nationally, housing starts are at an annual rate of about one million units, down from two million in 2005, the peak year. Mr. Dewey says housing starts in his area are down 40%. The picture is even gloomier in cities like Atlanta, Phoenix and Las Vegas.

Despite the economic downturn, the Latino immigrant working-age population continued to grow through 2007, albeit at a slower pace. Having absorbed an additional 736,000 Hispanic immigrants in 2005, the U.S. work force took in only 325,000 foreign-born Latinos in the first quarter of 2007, says the Pew Hispanic study.

The number of illegal immigrants apprehended along the U.S.-Mexico border is dropping, an indication that the softening economy and beefed-up security could be deterring unauthorized crossings. However, undocumented immigrants who are already here may be inclined to endure the hard times rather than return home temporarily because it has become more difficult to sneak across the border.

Labor-force participation -- the employed or job-seeking share of a population -- among foreign-born Hispanics has remained unchanged, or 70% in the first quarters of the years 2006, 2007 and 2008 -- an indication that they aren't returning to their countries of origin.

"There is a resiliency in this work force; the immigrants remain active -- either on the job or looking for a job," says Mr. Kochhar, the economist at Pew Hispanic. "Because they are foreign-born they don't have access to social safety nets." At least some workers have flocked to landscaping, janitorial and other service-sector jobs, he says.

Write to Miriam Jordan at miriam.jordan@wsj.com

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