Event: The August Employment Situation, released today by the US Bureau of Labor Statistics (BLS), indicates that total nonfarm employment rose by +187,000 in August on a seasonally adjusted basis, while temporary help services employment fell by -18,900 jobs. The temporary agency penetration rate was 1.88% in August, down slightly from a revised 1.89% in July. The national unemployment rate rose to 3.8% in August, from 3.5% in July, reflecting an increase in the labor force participation rate to 62.8% from 62.6% where it had remained for the entire period from March through July.

Employment expanded in most industry groups. The group with the largest gain was again Health and social assistance, which added +97,300 jobs; followed by Leisure and hospitality, which added +40,000 jobs; and Professional services (excluding temporary help services), which added +37,900 jobs. Employment declined in three sectors and the temporary help services industry. The greatest decline was in Transportation and warehousing, which fell by -34,200; followed by Temporary help services, which fell by -18,900; and Information, which fell by -15,000.

BLS Revisions:

The change in total nonfarm payroll employment for June was revised down by 80,000, from +185,000 to +105,000, and the change for July was revised down by 30,000, from +187,000 to +157,000. With these revisions, employment in June and July combined is 110,000 lower than previously reported.

The change in temporary help services employment in June was revised down from a loss of -20,200 to a loss of -36,000, and the previously estimated decline of -22,100 in July was revised down to a decline of -23,900. With these revisions, temporary help services employment in July was -17,600 lower than previously reported.

SIA’s Perspective: 

The US economy added +187,000 jobs in August, 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 increased by 30 basis points month-over-month, a scale of increase rarely seen outside of recessions. However, this coincides with a similarly-rare large increase in labor force participation. The number of unemployed persons increased by 514,000, while the labor force grew by 736,000. The overall image from this month’s Employment Situation is mixed.

Temporary help employment declined again in August, and is similar to its 2019 levels, and -2.2% 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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