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US Jobs Report: August 2019

Event- On a seasonally adjusted basis, total nonfarm employment rose by 164,000 in July, according to the US Bureau of Labor Statistics (BLS) in its monthly jobs report. Temporary help services gained 2,200 jobs for the month, though the gain in July was more than offset by downward revisions to May and June. The temporary staffing penetration rate was virtually unchanged from the prior (revised) month, at 2.00%. The national unemployment rate remained at 3.7%.

Background and Analysis- On a year-over-year (y/y) basis (July 2019 over July 2018), total nonfarm employment was up 1.5%, and monthly job gains have averaged approximately 187,000 over the past 12 months. Temporary help employment was up 1.0% y/y, with mild monthly job gains of approximately 2,500 over the past 12 months.

Of the 15 major industry groups, 12 added jobs in July. The three that most drove total nonfarm employment growth (on a seasonally adjusted basis) were health & social assistance (+50,400), professional services excluding temporary help (+35,800), and financial activities (+18,000). The three decliners for the month were information (-10,000), natural resources and mining (-5,000) and retail trade (-3,600). The three biggest gainers in terms of y/y percentage growth were construction, health & social assistance, and transportation & warehousing (2.8%, 2.7% and 2.7%, respectively). After recent monthly declines, natural resources & mining has fallen to fourth (2.5%). Information and retail trade continue to be the two decliners on a y/y basis (-0.5% and -0.4%, respectively).

Wage growth has been cooling slightly after gaining traction last year. Y/y growth in average weekly earnings was 2.6% in July, a deceleration from the average of 3.2% over the last twelve months, driven by softer growth in average hourly earnings and a small decline in the average hours worked per week.

BLS Revisions- The change in total nonfarm payroll employment for June was revised from +224,000 to +193,000, and the change for May was revised from +72,000 to +62,000. With these revisions, total nonfarm employment gains were 41,000 lower than previously reported.

The change in temporary help services employment for June was revised from +4,300 to -900 and the change for May was revised from -300 to -2,000. With these revisions, temporary help employment growth was lower than previously reported by 6,900 jobs, more than offsetting the gain of 2,200 jobs in July. This is the third month in a row in which downward revisions more than offset job gains for the month.

Staffing Industry Analysts’ Perspective- For the third month in a row, downward revisions to prior months more than offset the growth in temporary help employment reported for the most recent month. As a result of that, along with the declines from earlier in the year, temporary help employment has lost 26,000 jobs so far this year, and the penetration rate (share of total nonfarm employment made up by temporary help) has declined from 2.04% in December to 2.00% in July. These trends are consistent with a cooling economic backdrop.

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Monthly Employment Situation August 2019 - You do not have permission to view this object.

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