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June US Jobs Report

Event: On a seasonally adjusted basis, total nonfarm employment increased by 138,000 and the unemployment rate fell by 11 basis points to a cycle low of 4.29% in May, per the U.S. Bureau of Labor Statistics (BLS) in its monthly jobs report. Temporary help services employment increased by 0.43% in May, adding 12,900 jobs. The temporary agency penetration rate edged up to 2.064%, an all-time high.

Background and Analysis: On a year-over-year (y/y) basis (May 2017 over May 2016), total nonfarm employment was up 1.6%, and monthly job gains have averaged approximately 189,000 over the past 12 months. Temporary help employment was up 4.9% y/y, with monthly job gains averaging approximately 11,700 over the past 12 months. 

The economic sectors that most drove total nonfarm employment growth in May included healthcare (+32,300) leisure & hospitality (+31,000), and professional services (excluding temporary help, +25,100). Five sectors saw job losses on the month: government (-7,000), retail trade (-6,100), wholesale trade (-2,100), information (-2,000) and manufacturing (-1,000). 

BLS Revisions: The change in total nonfarm payroll employment for March was revised from +79,000 to +50,000, and the change for April was revised from +211,000 to 174,000. With these revisions, total nonfarm employment gains during the two-month period were 66,000 less than previously reported.

The change in temporary help services employment for March was revised from +13,000 to +12,800, and the change for April was revised from +5,800 to +4,100. With these revisions, temporary help employment growth was 1,900 less than previously reported.

Staffing Industry Analysts’ Perspective: Total nonfarm jobs growth in May fell short of the +182K median forecast of economists surveyed by Bloomberg, though we would note that some deceleration in the volume of monthly additions is to be expected as the economy nears full employment. The unemployment rate declined to 4.3%, its lowest level during this economic expansion, though it was driven by a sequential decline in labor force participation to 62.7% from April’s 62.9%. 

Leisure & hospitality (+31K) was among the leading sectors for the second straight month, propelled by strength in the food services and drinking places industry, helping abate concerns of a falloff in consumer spending created by the four-month losing streak in retail trade. Natural resources & mining added jobs for the seventh month in a row, and led all sectors in terms of percentage growth for the month, at 0.9%. 

Temporary help employment (+12.9K) exhibited a welcome improvement from April’s underwhelming growth, which was revised even lower with this month’s report. The y/y growth rate in temp help accelerated to its strongest pace in nearly two years, at 4.9%, and the temporary penetration rate continues to edge into new high territory. 

Corporate Member subscribers may download employment figures in greater detail from a link that will appear below:   

Monthly Employment Situation June 2017 - You do not have permission to view this object.

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