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May US Jobs Report

Event: On a seasonally adjusted basis, total nonfarm employment increased by 211,000 and the unemployment rate fell by 10 basis points to a cycle low of 4.40% in April, according to the U.S. Bureau of Labor Statistics (BLS) in its monthly jobs report. Temporary help services employment increased by 0.19% in April, adding 5,800 jobs. The temporary agency penetration rate edged up to 2.058%, an all-time high.

Background and Analysis: On a year-over-year (y/y) basis (April 2017 over April 2016), total nonfarm employment was up 1.6%, and monthly job gains have averaged approximately 186,000 over the past 12 months. Temporary help employment was up 3.9% y/y, with monthly job gains averaging approximately 9,400 over the past 12 months. 

The economic sectors that most drove total nonfarm employment growth in April included leisure & hospitality (+55,000), healthcare (+36,800) and professional services (excluding temporary help, +33,200). The only sector to lose jobs on the month was information (-7,000). 

BLS Revisions: The change in total nonfarm payroll employment for February was revised from +219,000 to +232,000, and the change for March was revised from +98,000 to +79,000. With these revisions, total nonfarm employment gains during the two-month period were 6,000 less than previously reported.

The change in temporary help services employment for February was revised from +8,900 to +9,800, and the change for March was revised from +10,500 to +13,000. With these revisions, temporary help employment growth was 3,400 greater than previously reported.

Staffing Industry Analysts’ Perspective: Total nonfarm jobs growth in April came in ahead of the +185K median forecast of economists surveyed by Bloomberg, an encouraging return to trend after a weak March, made weaker by the downward revision in this report. The unemployment rate declined to 4.4%, its lowest level during this economic expansion, though it was aided by a sequential decline in labor force participation. 

Leisure & hospitality (+55K) had its best month since October 2015, propelled by a gain of 26K jobs in the food services and drinking places industry. Natural resources & mining was the top performer on a percentage basis, expanding by 1.4% in April, and is up 3.1% over the past year. Information was the only sector showing a contraction (-7K), losing jobs for the seventh consecutive month. 

Though the increase in temporary help employment (+6K) fell short of its trailing-12-month average, it is nonetheless encouraging to begin the year with four months of gains. Year-over-year growth held at its strongest pace since mid-2015, accompanied by another incremental improvement in the temporary agency penetration rate. With most publicly traded staffing firms noting improving demand trends in their Q1 earnings reports, we maintain our positive outlook for temporary help employment in the months to come..

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

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

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