Event: The September Employment Situation, released today by the US Bureau of Labor Statistics (BLS), indicates that total nonfarm employment rose by +336,000 in September on a seasonally adjusted basis, while temporary help services employment fell by -4,200 jobs. The temporary agency penetration rate was 1.88% in September, steady with its August rate of 1.88%. The national unemployment rate remained at 3.8% in September, unchanged from August.

Employment expanded in most industry groups. The group with the largest gain was Leisure and hospitality, which added +96,000 jobs; followed by Government, which added +73,000; and Health and social assistance, which added +65,900 jobs. Employment declined in the Temporary help industry and the Information sector. The greatest decline was in Information, which fell by -5,000; followed by Temporary help services, which fell by -4,200.

BLS Revisions:

The change in total nonfarm payroll employment for July was revised up by 79,000, from +157,000 to +236,000, and the change for August was revised up by 40,000, from +187,000 to +227,000. With these revisions, employment in July and August combined is 119,000 higher than previously reported.

The change in temporary help services employment in July was revised up from a loss of -23,900 to a loss of -17,400, and the previously estimated decline of -18,900 in August was revised up to a decline of -4,200. With these revisions, temporary help services employment in August was +12,100 higher than previously reported.

SIA’s Perspective: 

The US economy added +336,000 jobs in September, dramatically exceeding the median forecasts in the Reuters and Bloomberg surveys of economists, both of which called for a gain of +170,000. The unemployment rate remained steady at 3.8%. Likewise, the overall and the prime age (25-54) labor force participation rates remained flat, at 62.8% and 83.5% respectively. The unemployment level increased modestly, by only 5,000 – less than one-tenth its August increase.

Temporary help employment declined again in September, but continued the trend of less-severe sequential declines that began in July, and the month-over-month decline of -4,200 was the slowest pace of decline since March, which saw a month-over-month decline of -3,300. Temporary help employment remains similar to its 2019 levels and is -1.9% below its pre-pandemic all-time high of 3.001 million in October 2018.

The industry continues to gradually descend from the pandemic era highs. This dynamic implies increased competitive pressures but continuing and large opportunities for those staffing firms that have developed a competitive advantage via either their technology, their service offerings, or both.

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