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US Jobs Report: April 2019

Event- On a seasonally adjusted basis, total nonfarm employment rose by 196,000 in March, according to the US Bureau of Labor Statistics (BLS) in its monthly jobs report. Temporary help services lost 5,400 jobs for the month. The temporary staffing penetration rate in March sank to 2.010%, its lowest rate since July 2017. The national unemployment rate remained at 3.8%.

Background and Analysis- On a year-over-year (y/y) basis (March 2019 over March 2018), total nonfarm employment was up 1.7%, and monthly job gains have averaged approximately 211,000 over the past 12 months. Temporary help employment was up 1.5% y/y, with monthly job gains averaging approximately 3,700 over the past 12 months.

Of the 15 major industry groups, eleven added jobs for the month. The three that most drove total nonfarm employment growth (on a seasonally adjusted basis) were healthcare and social assistance (+61,200), professional services excluding temporary help (+42,400), and leisure & hospitality (+33,000). On a y/y percentage basis, natural resources/mining, construction, and transportation and warehousing continue to be the three strongest, up 6.0%, 3.4%, and 3.3%, respectively; the two decliners were information (-0.1%) and retail trade (-0.2%).

Y/y growth in average weekly earnings was up slightly, from 3.1% in February to 3.2% in March.

BLS Revisions- The change in total nonfarm payroll employment for February was revised from +20,000 to +33,000, and the change for January was revised from +311,000 to +312,000. With these revisions, total nonfarm employment gains were 14,000 greater than previously reported.

The change in temporary help services employment for February was revised from +5,800 to +3,100, and the change for January was revised from -11,500 to -26,300. With these revisions, temporary help employment growth was lower than previously reported by 17,500 jobs.

Staffing Industry Analysts’ Perspective- After last month’s report of a very modest increase of 20,000 jobs in January (upwardly revised in this month’s report to 33,000), people are breathing a sigh of relief that we did not see a similar jobs report this month. Nevertheless, this was a lukewarm jobs report overall, and a negative report for temporary staffing specifically. While the 196,000 rise in total nonfarm employment was slightly above a Bloomberg survey consensus estimate of 177,000, it was not a 250,000+ number such as the ones we had been getting immediately following weak months. On average, jobs rose 180,000 per month in Q1, a bit milder than the 233,000 per month in the prior quarter.

Not only did temporary staffing lose 5,400 jobs in March, but January and February were downwardly revised by a combined 17,500 jobs. In other words, the current level of employment in the temporary staffing industry is 22,900 jobs lower than the level reported by BLS in the previous month’s report. According to BLS, the industry lost an average of 9,500 jobs per month in Q1. As temporary staffing is a leading indicator, this trend is one data point suggesting slower economic growth ahead.

Notably, the US labor force participation rate among people 25 to 54 years of age remained at 82.5%. While this rate has recovered from the worst of the last recession and subsequent recovery (trough of 80.6%), it has still not recovered to even the troughs from the two cycles before the last recession, and is well below the 1999 peak of 84.6%. Excluding the last recession and subsequent recovery, the current labor participation rate among this demographic is the lowest since 1987. Even in this tenth year of economic recovery, not all metrics have fully recovered.

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

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