US Jobs Report: May 2019

Event- On a seasonally adjusted basis, total nonfarm employment rose by 263,000 in April, according to the US Bureau of Labor Statistics (BLS) in its monthly jobs report. Temporary help services gained 18,000 jobs for the month. The temporary staffing penetration rate in April ticked back up to 2.020%, its highest rate since December 2018. The national unemployment rate dropped from 3.8% to 3.6% for the month, entirely driven by a decline in the labor force.

Background and Analysis- On a year-over-year (y/y) basis (April 2019 over April 2018), total nonfarm employment was up 1.8%, and monthly job gains have averaged approximately 218,000 over the past 12 months. Temporary help employment was up 1.8% y/y, with monthly job gains averaging approximately 4,500 over the past 12 months.

Of the 15 major industry groups, twelve 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 (+58,100), healthcare and social assistance (+52,600) and leisure & hospitality (+34,000). Despite being below its level from January, and one of the three decliners for the month (the other two were information and retail trade), natural resources/mining continues to lead all industries in y/y percentage growth (4.1%), with construction, and transportation and warehousing continuing to round out the top three (3.5%, and 3.3%, respectively). Information and retail trade continue to be the two decliners on a y/y basis (-0.5% and -0.3%, respectively).

Y/y growth in average weekly earnings was 2.9% in April, a deceleration from 3.2% in March and 3.5% in January, with declines in work-hours per week more than offsetting increases in the average hourly wage.

BLS Revisions- The change in total nonfarm payroll employment for March was revised from +196,000 to 189,000, and the change for February was revised from +33,000 to +56,000. With these revisions, total nonfarm employment gains were 16,000 greater than previously reported.

The change in temporary help services employment for March was revised from -5,400 to -5,800, and the change for February was revised from +3,100 to +7,000. With these revisions, temporary help employment growth was greater than previously reported by 3,500 jobs. 

Staffing Industry Analysts’ Perspective- In last month’s jobs report, we noted that the average monthly growth in jobs of 180,000 for Q1 was a bit milder than the 233,000 per month in the prior quarter. This month’s jobs report brings the year-to-date average up to 205,000, a solid run-rate.

We also noted in last month’s jobs report that temporary staffing lost an average of 9,500 jobs per month in Q1, a bit concerning as temporary staffing can be a leading economic indicator (total nonfarm employment is more coincident than leading). With this month’s jobs report, the year-to-date monthly average improves to a loss of 1,800 jobs. Continued improvement in that year-to-date average over the next few months would suggest this economic expansion still has tread in its tires, and the poor Q1 for temporary staffing was driven more by events specific to that period such as weather or the partial government shutdown.

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


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