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February 2024 Jobs Report

February 2024 Jobs Report

Michael Schultz, Timothy Landhuis
| February 2, 2024

Public Summary

  • Event: 

    The January Employment Situation, released today by the US Bureau of Labor Statistics (BLS), indicates that total nonfarm employment rose by +353,000 in January on a seasonally adjusted basis, while temporary help services employment rose by +3,900 jobs. The temporary agency penetration rate was 1.76% in January, stable with a revised December rate of 1.76%. The national unemployment rate was unchanged at 3.7%.

    Employment expanded in all but one industry groups. The group with the largest gain was again Health and social assistance, which added +100,400 jobs; followed by Professional services (excluding temporary help), which added +70,100; and Retail trade, which added +45,200. Employment declined in Natural resources and mining, falling by -6,000.

    BLS Revisions:

    The change in total nonfarm payroll employment for November was revised up by 9,000, from +173,000 to +182,000, and the change for December was revised up by 117,000, from +216,000 to +333,000. With these revisions, employment in November and December combined is 126,000 higher than previously reported.

    The change in temporary help services employment in November was revised up, from a decrease of -22,100 to a loss of -13,600, and the previously estimated December decline of -33,300 was revised up to a loss of -16,80. However, in comparing these values with those reported in the January Employment Situation, these improvements in the month-over-month changes were swamped by the annual benchmark update and seasonal factor adjustments. On net, even with the improved month-over-month figures, temporary help services employment in November and December was -62,000 lower than previously reported. Reviewing the impact of these benchmark and seasonal factor changes by comparing the current data vintage with last month’s vintage, finds that employment in temporary help services in 2023 was, on average, previously overestimated by 90,700 employees, and was consistently over-estimated in every month of the year.

    SIA’s Perspective: 

    The US economy added +353,000 jobs in January, exceeding the 185,000 median forecast in a Bloomberg survey of economists. The unemployment rate remained steady at 3.7%, the overall labor force participation was flat, remaining at 62.5%, and the prime age (25-54) labor force participation ticked up from 83.2% to 83.3%.

    In January, temporary help services posted a small month-over-month increase in employment, +3,900. Provided this survives future monthly revisions (the initial October estimate was a monthly gain), it is a welcome break from a long string of monthly declines. However, aggregate hours and payroll figures declined, suggesting ongoing weakness for the industry. Similarly, the Manufacturing and Transportation and warehousing industries posted employment gains —  generally a good sign for temporary help — but aggregate hours declined for both sectors, and manufacturing overtime likewise fell, again suggesting further weakness for temporary help services.

    Competitive pressures continue to increase but there are continuing and large opportunities 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.

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Michael Schultz, Timothy Landhuis
| February 2, 2024