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May 2024 Jobs Report

May 2024 Jobs Report

Michael Schultz, Timothy Landhuis
| May 3, 2024

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The April Employment Situation, released today by the US Bureau of Labor Statistics (BLS), indicates that total nonfarm employment rose by +175,000 in April on a seasonally adjusted basis, while temporary help services employment declined by -16,400 jobs. The temporary agency penetration rate was 1.73% in April, down from a revised March rate of 1.74%. The national unemployment rate increased to 3.9%, from 3.8%.

Employment expanded in most industry groups. The group with the largest gain was again Health and social assistance, which added +87,000 jobs; followed by Transportation and warehousing, which added +21,800 jobs; and Retail trade, which added 20,100 jobs. Employment declined in two sectors, Natural resources and mining, which declined by -3,000; and Information, which declined by -8,000; as well as the Temporary help services industry, which fell by -16,400.

BLS Revisions:

The change in total nonfarm payroll employment for February was revised down by 34,000, from +270,000 to +236,000, and the change for March was revised up by 12,000, from +303,000 to +315,000. With these revisions, employment in February and March combined is 22,000 lower than previously reported.

The change in temporary help services employment in February was revised down, from a decrease of -11,900 to a loss of -16,200, and the previously estimated March decline of -1,300 was revised down to a loss of -2,700. On net, temporary help services employment in March was -5,700 lower than previously reported.

SIA’s Perspective: 

The US economy added +175,000 jobs in April, falling meaningfully short of the +240,000 median forecast in a Bloomberg survey of economists and the +243,000 median forecast in the Reuters’ survey. Overall labor force participation remained steady at 62.7% and the prime age (25-54) labor force participation rate increased to 83.5%.

Aggregate hours in manufacturing increased slightly, while hours of manufacturing production workers were flat and aggregate overtime was effectively flat, advancing by +0.1%. Hours in transportation and warehousing declined -0.7%, which is unexpected given the employment gain in this sector. With the caveat that the BLS data for temporary help services largely reflect the industrial segment due its large share of headcount, this again suggests ongoing weakness in current demand for temporary help services – particularly as manufacturing overtime hours remain near their all-time, non-recessionary low. We expect that a manufacturing rebound will provide a strong tailwind for BLS measurements of temporary help services and anticipate this sector firming up following interest rate cuts. Rate cuts should also assist the tech sector, providing support for IT staffing.

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.

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Michael Schultz, Timothy Landhuis
| May 3, 2024