US Jobs Report: November 2018

Event- On a seasonally adjusted basis, total nonfarm employment rose by 250,000 in October, according to the US Bureau of Labor Statistics (BLS) in its monthly jobs report. The gain of 250,000 exceeds the median projection of 200,000 jobs from the Bloomberg survey. Temporary help services employment rose by 0.1% from the prior month, adding 3,300 jobs, and the temporary penetration rate remained roughly flat at 2.04%. The national unemployment rate remained at 3.7%.

Background and Analysis- On a year-over-year (y/y) basis (October 2018 over October 2017), total nonfarm employment was up 1.7%, and monthly job gains have averaged approximately 210,000 over the past 12 months. Temporary help employment was up 2.2% y/y, with monthly job gains averaging approximately 5,500 over the past 12 months.

Of the 15 major industry groups, the three that most drove total nonfarm employment growth in October (on a seasonally adjusted basis) include healthcare and social assistance (+46,700), leisure and hospitality (+42,000), and manufacturing (+32,000). Gains were broad across industries, as there was only one decliner, education (-2,500). On a year-over-year basis, natural resources/mining continued to lead all industry groups in terms of percentage growth, with 9.4%, once again followed by construction and transportation/warehousing, with 4.7% and 3.5% growth, respectively. Information was the one decliner on a y/y basis, down 0.5%.

Wages appear to be gaining traction at last, with y/y growth in average hourly earnings accelerating to 3.1% in October.

BLS Revisions- The change in total nonfarm payroll employment for September was revised from +134,000 to +118,000, and the change for August was revised from +270,000 to +286,000. With these revisions, total nonfarm employment gains during the two-month period were unchanged.

The change in temporary help services employment for September was revised from +10,600 to +7,600, and the change for August was revised from +12,400 to +10,800. With these revisions, temporary help employment growth was less than previously reported by 4,600 jobs.

Staffing Industry Analysts’ Perspective- Regarding total nonfarm employment, this was a favorable jobs report. Even if you take the average of the last two months (to account for the recovery from the impact of Hurricane Florence in the prior month), the employment gain is a moderate 184,000. Moreover, wage growth, the one area that had not been as strong for so many years in this expansion period, appears to be gaining traction at last.

Temporary help employment growth, however, has become increasingly mild, with the temporary penetration rate remaining roughly flat throughout most of this year. Temporary staffing may be reaching a plateau, which would be normal if we are approaching the tail end of an expansion in the business cycle.

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Monthly Employment Situation November 2018 - You do not have permission to view this object.


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