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Temp jobs number is up, but downward revisions offset gains

July 08, 2019

The year-over-year growth rate for temporary jobs rose in June as the US added 4,300 temporary positions and total US nonfarm jobs rose by 224,000, according to seasonally adjusted data released Friday by the US Bureau of Labor Statistics.

Some point to the overall jobs numbers as reducing concerns about an economic slowdown, although the temporary jobs numbers may not be as good as the number reported Friday shows.

“Headline numbers from the last two jobs reports have suggested steady growth in temporary staffing employment, but these gains have been more than offset by downward revisions to prior months,” said Tony Gregoire, research director at Staffing Industry Analysts. “In fact, temporary staffing employment has lost 22,000 jobs since December as the economy has cooled.

On the other hand, the headline number of 224,000 was more than expected. Total US employment was 151.3 million in June, and the temp penetration rate was 2.01% in June roughly the same as May.

Job gains had averaged just 171,000 per month over the last three months.

The Conference Board reported the increase in total nonfarm jobs was well above expectations. And while employment growth is clearly slower this year than in 2018, the change has been modest so far.

“Today’s report reduces concerns about a more significant slowdown in the US economy,” according to The Conference Board. “The manufacturing sector added 17,000 jobs in June, after essentially no growth in the previous three months. Encouragingly, the number of jobs in the temporary help industry, one of the best leading indicators of employment, is growing again in the second quarter, after dropping in the first quarter.”

The organization expects the US economy to grow slightly above its 2% trend through at least the end of the year and continue to tighten the labor market.

Also in Friday’s report, the unemployment rate was little changed in June at 3.7% compared to 3.6% in May. The college-level unemployment rate was unchanged at 2.1% in June.

However, wages were a concern. Wages grew 3.1%, below expectations of 3.2%, Glassdoor Senior Economist Daniel Zhao wrote in a blog post.

“At a time when the historically tight labor market should be translating into higher wages for workers, decelerating wage gains remain a black spot,” Zhao wrote.

full review of Friday’s jobs report is available online to corporate members of Staffing Industry Analysts.

Click on charts to enlarge.


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