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US Jobs Report: October 2019

Event- On a seasonally adjusted basis, total nonfarm employment rose by 136,000 in September, according to the US Bureau of Labor Statistics (BLS) in its monthly jobs report. Temporary help services gained 10,000 jobs for the month. The temporary staffing penetration rate inched up from 2.00% last month to 2.01%. The national unemployment rate declined from 3.7% to 3.5%, the lowest level since 1969, even as the labor force increased. (The employment gains from the household survey, the survey used to determine unemployment, were much higher than the 136,000 gain in the establishment survey.)

Background and Analysis- On a year-over-year (y/y) basis (September 2019 over September 2018), total nonfarm employment was up 1.44%, and monthly job gains have averaged approximately 179,000 over the past 12 months. Temporary help employment was up 0.4% y/y, with mild monthly job gains of approximately 1,100 over the past 12 months.

Of the 15 major industry groups, 10 added jobs in September. The three that most drove total nonfarm employment growth (on a seasonally adjusted basis) were health & social assistance (+41,400), professional services excluding temporary help (+23,800), and government (+22,000). These were also the three biggest drivers in the prior month’s report, though government dropped from second to third, as fewer jobs associated with the 2020 census were added. The biggest decliner for the month was once again retail trade (-11,400); the remaining decliners were 3,000 or less.

The three biggest gainers in terms of y/y percentage growth were health & social assistance, professional services excluding temporary help, and leisure and hospitality (2.7%, 2.3% and 2.1%, respectively). Construction fell out of the top three. It had been the last hold out from the period when the industry, along with transportation/warehousing and natural resources/mining, made up the top three for many months. Retail trade is the only category declining on a y/y basis (-0.4%), as the industry continues to lose jobs to e-commerce.

Y/y growth in average weekly earnings bounced back down to 2.6% for September, after climbing from 2.6% to 2.9% in August. In any case, growth remains below the average of 3.1% from the prior twelve months.

BLS Revisions- The change in total nonfarm payroll employment for August was revised from +130,000 to +168,000, and the change for July was revised from +159,000 to +166,000. With these revisions, total nonfarm employment gains were 45,000 higher than previously reported.

The change in temporary help services employment for August was revised from +15,400 to +14,500 and the change for July was revised from -7,900 to -10,500. With these revisions, temporary help employment growth was lower than previously reported by 3,500 jobs.

Staffing Industry Analysts’ Perspective- After three months of declining employment in temporary help, the industry has gained jobs in each of the past two months, and the penetration rate has risen from 1.99% in July (lowest since April 2017) to 2.01%. In the next few months, we will see if this is the beginning of a new upward trend in temporary staffing, or just part of the small ups and downs in a generally flat year.

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

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