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US Jobs Report: January 2019

Event- On a seasonally adjusted basis, total nonfarm employment rose by 312,000 in December, according to the US Bureau of Labor Statistics (BLS) in its monthly jobs report. Temporary help services employment rose by 0.3% from the prior month, adding 10,300 jobs, and the temporary staffing penetration rate remained at a record 2.06%. Based on a separate BLS survey of households, the national unemployment rate rose slightly to 3.9%, in part due to an increase in the percent of the population participating in the labor force (63.1%).

Background and Analysis- On a year-over-year (y/y) basis (December 2018 over December 2017), total nonfarm employment was up 1.8%, and monthly job gains have averaged approximately 220,000 over the past 12 months. Temporary help employment was up 3.3% y/y, with monthly job gains averaging approximately 8,200 over the past 12 months.

Of the 15 major industry sectors, the five that most drove total nonfarm employment growth in December (on a seasonally adjusted basis) include healthcare and social assistance (+57,900), leisure and hospitality (+55,000), and construction (+38,000), professional services excluding temporary help (+32,700) and manufacturing (+32,000). The information sector was the only industry group that lost jobs in December (-1,000 jobs).

Growth in average hourly earnings accelerated to 3.2% y/y in December, up from 3.1% in November.

BLS Revisions- The change in total nonfarm payroll employment for November was revised from +155,000 to +176,000, and the change for October was revised from +237,000 to +274,000. With these revisions, total nonfarm employment gains were 58,000 higher than previously reported.

The change in temporary help services employment for November was revised from +8,300 to +10,500, and the change for October was revised from +16,500 to +15,800. With these revisions, temporary help employment growth was greater than previously reported by 1,500 jobs.

Staffing Industry Analysts’ Perspective- Total nonfarm employment rose by 312,000 jobs, well above (70% higher) the expected gain of 184,000 jobs. Job gains were broadly positive across a range of sectors in the economy, from professional services and healthcare, to the more cyclical sectors of manufacturing and construction. Manufacturing added 284,000 jobs in 2018, up from a gain of 207,000 jobs in 2017. Construction added 280,000 jobs in 2018, up from 250,000 jobs gained the prior year. In December, for the first time, total nonfarm employment in the US surpassed 150 million jobs.

Employment in temporary help services increased by 10,300 jobs in December, marking the sixth straight month of job gains greater than 10,000. After the choppy growth reported in the first half of 2018 (including 4 months that featured job declines), the consistent job gains in temporary help services reported in the second half of the year represent a favorable sign for the US staffing industry.

The labor force participation rate rose to 63.1% in December, matching the highest level reached since September 2013, and a very positive sign in this jobs report, along with the employment gains. Looking ahead, we believe the ability of the US economy to draw in more workers from the sidelines and into the labor force will be a key factor in determining how long the current economic expansion can continue without interruption.

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

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