July 2024 Jobs Report
July 2024 Jobs Report

Public
Event:
The June Employment Situation, released today by the US Bureau of Labor Statistics (BLS), indicates that total nonfarm employment rose by +206,000 in June on a seasonally adjusted basis, while temporary help services employment declined by -48,900 jobs. The temporary agency penetration rate was 1.68% in June, down from a revised May rate of 1.71%. The national unemployment rate increased to 4.1%, from 4.0%.
Employment expanded in most industry groups. The group with the largest gain was again Health and social assistance, which added +82,400 jobs; followed by Government, which added +70,000 jobs; and Professional services excluding temporary help, which added +31,900 jobs.
Employment declined in the Temporary help services industry, which fell by -48,900; the Retail trade sector, which fell by -8,500; the Manufacturing sector, which fell by -8,000; and the private Education sector, which fell by -700.
BLS Revisions:
The change in total nonfarm payroll employment for April was revised down by 57,000, from +165,000 to +108,000, and the change for May was revised down by 54,000, from +272,000 to +218,000. With these revisions, employment in April and May combined is 111,000 lower than previously reported.
The change in temporary help services employment in April was revised down, from a decrease of -12,300 to a loss of -23,700, and the previously estimated May decline of -14,100 was revised up to a loss of -15,900. On net, temporary help services employment in May was -13,200 lower than previously reported.
SIA’s Perspective:
The US economy added +206,000 jobs in June, exceeding the +190,000 median forecast in both the Bloomberg and Reuters surveys of economists.
Overall labor force participation rebounded in June, increasing 10 basis points, from 62.5% to 62.6% and the prime age (25-54) labor force participation rate similarly increased by 10 basis points from 83.6% to 83.7% - its highest rate since April 2001.
With the caveat that the BLS data for temporary help services largely reflect the industrial segment due its large share of headcount, data on major client verticals again indicate ongoing weakness in demand for temporary help services. Aggregate hours worked in manufacturing were almost unchanged, declining by -0.1% M/M while advancing +0.3% Y/Y, and aggregate overtime hours were flat, down -0.1% M/M, up +3.5% Y/Y. Hours in transportation and warehousing advanced slightly, by +0.4% M/M but this continues a sideways trend, where advances and contractions roughly cancel out over a period of months. Hours worked in the sector again declined on a Y/Y basis, down -0.4%.
While additional decline was anticipated, the BLS’ June estimate for Temporary help services meaningfully underperformed expectations. Similarly, industry data such as our SIA | Bullhorn Staffing Index do not indicate a dramatic slowing in June but rather the continuation of existing trends. For this reason, we think that it is likely that the large June decline in temp help employment may be revised in next month’s Jobs Report to be a smaller decline.
We recently published a report describing our thoughts on the ongoing divergence of the staffing industry and the overall US economy, “Insights on the Recent Downturn in US Temporary Staffing 2024.” We strongly encourage readers to review this report for discussion of overarching factors underlying this weakness in staffing, as well as reasons for optimism.
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 remain high but opportunities remain for those staffing firms that have developed a competitive advantage via either their technology, their service offerings, or both.
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