Temp jobs fell again in August but the decline was less than those seen over the previous two months, according to data released today by the US Bureau of Labor Statistics. And with total nonfarm employment rising by less than expected, the jobs report points to a slowing economy and keeps the way clear for a possible Federal Reserve rate cut, according to SIA analysis.

The number of temp jobs fell by 2,900 from the month before to approximately 2.69 million. The temp penetration rate — temp jobs as a percent of total employment — was unchanged between August and July at 1.70%.

The decline follows decreases of 18,100 in July and 29,700 in June as based on revised data.

The US added a less-than-estimated 142,000 jobs overall, and August’s unemployment rate of 4.2% was unchanged from July.

“Today’s jobs report confirms the trend of a gradually slowing economy, paving the way for the Federal Reserve to start reducing interest rates on Sept. 18, which we believe will be positive for business sentiment,” Timothy Landhuis, VP of research at SIA, said. “Nevertheless, demand for staffing appears muted in the very near term, as highlighted by the sizable August decline in manufacturing jobs.”

Total nonfarm employment in the US rose by 142,000 jobs, a bigger gain than the 89,000 added in July. The BLS noted August’s number was in line with average job growth in recent months after job growth in June and July had been revised downward with a combined 86,000 fewer jobs than previously reported.

The total number of nonfarm jobs came in lower than expected, Elizabeth Renter, senior economist at NerdWallet, said in a statement.

“The concern lies in the trajectory — not necessarily where we are, but where we’re headed. Where we are is OK,” Renter said. “Job growth is subdued but solid, layoffs are low and unemployment is not high. But the labor market is actively cooling, and we don’t want it to continue too much further on that path.”

CNN reported that one estimate called for a gain of 160,000 nonfarm jobs.

Sectors adding jobs in August included construction and healthcare.

Construction employment rose by 34,000 in August, which was higher than its average monthly gain of 19,000 over the prior 12 months. Within this sector, heavy and civil engineering construction added 14,000 jobs.

Healthcare added 31,000 jobs in August, though this is about half the monthly average of 60,000 over the past 12 months. Within this sector, ambulatory healthcare services added 24,000 jobs.

Among sectors shedding jobs, manufacturing employment edged downward by 24,000.

Average hourly earnings for all employees in private nonfarm payrolls rose by 0.4% to $35.21. They increased 3.8% over the past 12 months.

“Today’s jobs report demonstrates that this summer’s Great Waiting Game has continued, with both employers and employees holding out for proof of improvement versus speculation of forecasts,” Becky Frankiewicz, president of ManpowerGroup North America and chief commercial officer at ManpowerGroup, said in a statement.

“Our real-time data showed an August pick-up in job postings following a slower July, but year-over-year stability,” Frankiewicz added. “We’re not seeing that translate into the BLS just yet — we can expect this seasonality in weeks ahead as employers shore up their talent for the fall.”

For more information on the jobs numbers, see SIA’s September 2024 Jobs Report released today.