March US Jobs Report

Event: On a seasonally adjusted basis, total nonfarm employment increased by 235,000 and the unemployment rate fell slightly by 8 basis points to 4.70% in February, according to the U.S. Bureau of Labor Statistics (BLS) in its monthly jobs report. Temporary help services employment increased by 0.10% in February, adding 3,100 jobs. The temporary penetration rate was unchanged at 2.04%, below the all-time high of 2.05% previously reached in December 2015 and November 2016.

Background and Analysis: On a year-over-year (y/y) basis (February 2016 over February 2015), total nonfarm employment was up 1.6%, and monthly job gains have averaged approximately 196,000 over the past 12 months. Temporary help employment was up 3.2% y/y, with monthly job gains averaging approximately 7,600 over the past 12 months. 

The economic sectors that most drove total nonfarm employment growth in February included construction (+58,000), professional services (excluding temporary help, +33,900), and healthcare (+32,500). The only sector that declined on the month was retail trade (-26,000).

BLS Revisions: The change in total nonfarm payroll employment for December was revised from +157,000 to +155,000, and the change for January was revised from +227,000 to +238,000. With these revisions, total nonfarm employment gains during the two-month period were 9,000 greater than previously reported.

The change in temporary help services employment for December was revised from -12,800 to -17,400, and the change for January was revised from +14,800 to +6,500. With these revisions, temporary help employment growth was 12,900 less than previously reported.  

Staffing Industry Analysts’ Perspective: The year has started off with two solid months of total nonfarm jobs growth, with February’s +235K exceeding the median forecast of economists surveyed by Bloomberg of +200K. The unemployment rate moved lower despite a 10 basis point sequential increase in the labor force participation rate, to 63.0%.

Construction had its strongest monthly employment increase in several years, and has added nearly 100K jobs already in 2017. In addition to the steady leadership of professional services and healthcare, solid gains were also seen in education (+29K), manufacturing (+28K) and leisure & hospitality (+26K). Strength was broad-based in February, as retail trade was the only sector that contracted, which is notable following its healthy gain in January (+40K). Natural resources & mining had the best month on a percentage basis, growing 1.3% and further evidencing the initiation of a new uptrend with its fourth straight monthly increase.

Temporary help employment growth was underwhelming in the context of an otherwise strong employment report, made more so by the downward revisions to the prior two months. That said, the longer-term picture continues to improve, as the 3.2% y/y growth rate was the highest since December 2015. The temporary penetration rate hovers just one basis point below the all-time high for the third straight month, and we maintain our expectation that new highs in this metric will be reached in 2017 as business confidence continues to improve.

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

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


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