Event: The March Employment Situation, released today by the US Bureau of Labor Statistics (BLS), indicates that total nonfarm employment rose by +236,000 in March on a seasonally adjusted basis, while temporary help services employment fell by -10,700 jobs. The temporary agency penetration rate declined to 1.96% in March, from a February rate of 1.97%. The national unemployment rate declined to 3.5% from 3.6% in February, even as labor force participation rose from 62.5% in February to 62.6% in March.

Employment expanded in most industry groups. The group with the largest gain was once again Leisure and hospitality, which added +72,000 jobs; followed by Health and social assistance, which added +50,800 jobs; and Professional services (excluding temporary help) which added +49,700 jobs. Employment declined in five sectors, with the most severe decline occurring in Retail trade, with a loss of -14,600. Employment also fell in Temporary help services, which fell by -10,700; Construction, which fell by -9,000; Financial activities, which fell by -1,000; and Manufacturing, which fell by -1,000.

BLS Revisions: The change in total nonfarm payroll employment for January was revised down by 32,000, from +504,000 to +472,000, and the change for February was revised up by 15,000, from +311,000 to +326,000. With these revisions, employment in January and February combined is 17,000 lower than previously reported.

The change in temporary help services employment in January was revised up from gain of +15,300 jobs to a gain of +16,600, and the previously estimated gain of +6,800 in February was revised down to a gain of +3,400. With these revisions, temporary help services employment in February was -2,100 lower than previously reported.

SIA’s Perspective: 

The US economy added +236,000 jobs in March, in-line with expectations and slightly above the median forecast in a Bloomberg survey of economists, which called for a gain of +230,000. This marks the twelfth consecutive month that nonfarm payroll growth has outpaced expectations per the Bloomberg survey. This continues a decelerating trend. In 2022, average monthly payroll growth was +399,000; three months into 2023, that figure is +345,000, with March’s payroll growth half of January’s revised figure.

Labor force participation continues to be a bright spot, increasing to 62.6% in March – it’s highest level since prior to the COVID-19 pandemic. The uptick in this metric implies growth in the supply of candidates looking for work, which is good news for the economy and for the staffing industry.

The prime age labor force participation rate (ages 25 through 54, those in the prime of their working years, being largely done with their education and too young to retire) recovered to its pre-pandemic peak of 83.1% in February and remained unchanged in March. Participation among people ages 55 and older continues to decline; the increasing participation rate represents people under 25 finding or looking for work. These trends suggest that labor scarcity will remain a challenge, particularly in the supply of experienced candidates, and scarcity will continue to support demand for staffing and workforce solutions even as economic growth slows.

The March decline in Temporary help employment was the first decline since December. Overall, for 2023, employment in Temporary help services remains up by 9,300. Though nonetheless below the record-high levels seen in 2022, this remains consistent with our expectation for a plateauing of the industry in 2023. Even a plateau in the staffing industry implies continuing and large opportunities for those staffing firms that have developed a competitive advantage via either their technology, their service offerings, or both.

On April 4th, SIA published our 2023 US Staffing Industry Forecast. This report provides our outlook for the US staffing industry in 2023 and 2024, overall and by segment. The forecast report is available to members.

Members may download this month’s jobs report or access our new interactive tool (beta) below.