Event:
The February Employment Situation, released today by the US Bureau of Labor Statistics (BLS), indicates that total nonfarm employment rose by +275,000 in February on a seasonally adjusted basis, while temporary help services employment declined by -15,400 jobs. The temporary agency penetration rate was 1.74% in February, down from a revised January rate of 1.75%. The national unemployment rate increased by 20 basis points, to 3.9%.
Employment expanded in most industry groups. The group with the largest gain was again Health and social assistance, which added +90,700 jobs; followed by Leisure and hospitality, which added 58,000 jobs; and Government, which added +52,000 jobs. Employment declined in three sectors, as well as in the Temporary help services industry. Wholesale trade employment declined by -1,200 jobs, Manufacturing employment declined by -4,000 jobs, and Education employment declined by -5,600 jobs. Employment in the Temporary help services industry declined by -15,400.
BLS Revisions:
The change in total nonfarm payroll employment for December was revised down by 43,000, from +333,000 to +290,000, and the change for January was revised down by 124,000, from +353,000 to +229,000. With these revisions, employment in December and January combined is 167,000 lower than previously reported.
The change in temporary help services employment in December was revised down, from a decrease of -16,800 to a loss of -21,300, and the previously estimated January gain of +3,900 was revised down to a loss of -1,200. On net, temporary help services employment in January was -9,600 lower than previously reported.
SIA’s Perspective:
The US economy added +275,000 jobs in February, exceeding the 200,000 median forecast in a Bloomberg survey of economists. The unemployment rate increased to 3.9%, with labor force status flow data indicating this reflects lower job-finding rates for the unemployed and those who newly entered the labor market during the month. The overall labor force participation rate remained 62.5%, while the prime age (25-54) labor force participation rate increased by 20 basis points to 83.5%.
The initially estimated small gain in temporary help employment in January, as previously occurred with an estimated gain back in October, was revised to a slight loss. This revision was implied by last month’s weakness in aggregate hours and overtime hours in manufacturing and the transportation & warehousing sector. Aggregate hours in manufacturing and transportation & warehousing were flat month-over-month in February but have trended lower over the past several months. Manufacturing overtime hours are slowly increasing, but remain near their all-time, non-recessionary lows. This again suggests ongoing weak demand for temporary help services. Nevertheless, with most economists projecting solid growth in the US economy this year (real GDP growth of 2% or higher), we are keeping our eyes open for signs of an eventual uptick in demand for temporary staffing.
Competitive pressures continue to increase but opportunities remain for those staffing firms that have developed a competitive advantage via either their technology, their service offerings, or both.
Members may download this month’s jobs report or access our new interactive tool (beta) below:
Monthly Employment Situation March 2024 – You do not have permission to view this object.
US Employment Situation (online interactive tool)