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US Jobs Report: June 2019

Event- On a seasonally adjusted basis, total nonfarm employment rose by 75,000 in May, according to the US Bureau of Labor Statistics (BLS) in its monthly jobs report. Temporary help services gained 5,100 jobs for the month, though the gain in May is more than offset by downward revisions to March and April. The temporary staffing penetration rate ticked up slightly in May to 2.015%, but below its record of 2.052% from December 2015. The national unemployment rate remained at its 49-year low of 3.6%.

Background and Analysis- On a year-over-year (y/y) basis (May 2019 over May 2018), 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 1.5% y/y, with mild monthly job gains of approximately 3,700 over the past 12 months.

Of the 15 major industry groups, ten added jobs for the month. The three that most drove total nonfarm employment growth (on a seasonally adjusted basis) were professional services excluding temporary help (+27,900, down from +58,100 in the prior month’s report), leisure & hospitality (+26,000, down from +34,000) and health and social assistance (+24,000, down from +52,600). Natural resources/mining, construction, and transportation/warehousing continue to lead all industries in y/y percentage growth (4.0%, 3.0% and 2.7%, respectively), despite recent cooling (y/y growth rates have come down from the respective levels of 6.8%, 3.6% and 3.1% in the January report). Information and retail trade continue to be the two decliners on a y/y basis (-1.2% and -0.5%, respectively).

Wage growth has been cooling slightly after gaining traction last year. Y/y growth in average weekly earnings was 2.8% in May, a deceleration from the average of 3.2% over the last twelve months, driven by softer growth in average hourly earnings and a decline in the average hours worked per week.

BLS Revisions- The change in total nonfarm payroll employment for April was revised from +263,000 to +224,000, and the change for March was revised from +189,000 to +153,000. With these revisions, total nonfarm employment gains were 75,000 lower than previously reported, offsetting the 75,000 gain in May (in other words, employment in this month’s jobs report is at exactly the same level as in last month’s report).

The change in temporary help services employment for April was revised from +17,900 to +9,900, and the change for March was revised from -5,800 to -10,500. With these revisions, temporary help employment growth was lower than previously reported by 12,700 jobs. These losses are more than twice that of the gain in May (thus making the level of temporary agency employment lower in this month’s report than in last month’s report).

Staffing Industry Analysts’ Perspective- In last month’s jobs report, we noted that the year-to-date average change in temporary help jobs per month improved from a loss of 9,500 to a loss of 1,800, and we noted that continued improvement in the year-to-date average over the next few months would suggest the poor Q1 for temporary staffing was likely driven more by events specific to that period, rather than suggestive of a longer term trend. However, this month’s report did not show continued improvement. As the downward revisions more than offset the gain reported for May, the average change in temporary help jobs per month worsened to a loss of 3,000. These flattish (and in some cases slightly downward) trends in temporary staffing volume are consistent with the latter stages of an economic expansion (ten years and counting).

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

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