Event: 

The November Employment Situation, released today by the US Bureau of Labor Statistics (BLS), indicates that total nonfarm employment rose by +227,000 in November on a seasonally adjusted basis, while temporary help services employment increased by +1,600 jobs. The temporary agency penetration rate was 1.66% in November, unchanged from a revised 1.66% in October. The national unemployment rate increased to 4.25% compared to a revised October rate of 4.15%.

Employment grew in almost every single sector. The group with the largest gain was Health and social assistance, which added +72,300 jobs; followed by Leisure and hospitality, which added +53,000 jobs; and Government, which added +33,000 jobs. Employment declined in only the Retail trade sector, which fell by -28,000, and employment was unchanged in the Information sector.

BLS Revisions:

The change in total nonfarm payroll employment for September was revised up by 32,000, from +223,000 to +255,000, and the change for October was revised up by 24,000, from +12,000 to +36,000. With these revisions, employment in September and October combined is 56,000 higher than previously reported.

The change in temporary help services employment in September was revised up, from a decrease of  -20,200 to an increase of +4,800, and the previously estimated October decrease of -48,500 was revised  up to a loss of -33,300. On net, temporary help services employment in October was +40,200 higher than previously reported.

SIA’s Perspective: 

The US economy added +227,000 jobs in November, above the +200,000 expected in both the Bloomberg and Reuters surveys of economists. Temporary help employment increased modestly in November, and the second revision for the September data indicates temporary help grew in that month, as well, up by +4,800 from August. These figures are consistent with other data, such as the SIA | Bullhorn Staffing Indicator, that suggest that industry volumes may finally be stabilizing.

The October Job Openings and Labor Turnover release, published earlier this week, showed job openings increased by +372,000 month-over-month on a seasonally-adjusted basis in October. However, the trend in openings remains downward; openings have regularly alternated between M/M growth and contraction in recent months. Openings were highest in Professional and business services, at 1.65 million, and this sector also had the greatest increase in the number of openings from September to October, up +209,000 (+14.5%).

On a seasonally-adjusted basis, realized hiring activity was down in October, -269,000 (-4.8%) below September. Hiring activity was also greatest in Professional and business services, at 984,000 but this was a decrease of -79,000 (-7.4%) from September. The greatest increase in hiring was in Retail trade, up 17,000 (+2.7%), while the largest decrease was in Leisure and hospitality, down -114,000 (-11.9%). Hiring in the Manufacturing sector declined in October – unsurprising given the extent of strike activity during the month and other disruptions such as hurricane impacts. Despite this decline, the trend for manufacturing hiring is relatively stable. Though -21,000 lower in October than September, October’s manufacturing’s hiring figure of 337,000 remains in-line with the trend since June and is almost identical to June’s hiring figure of 336,000. Combined with hiring stability in the Transportation, warehousing, and utilities industry group, this suggests the client verticals most relevant to BLS Temporary help services may be stabilizing and could return to growth soon.

Last month, we discussed employment growth at the state level in 2024. At the local level, during 2024 (October 2024 versus December 2023), employment has expanded most in New York City, up +68,500 (+98,500 for the New York Metropolitan Area); followed by the Dallas-Forth Worth-Arlington, TX metro area, up +61,000; and the Houston-Woodlands-Sugar Land, TX metro area, up +46,400. The fastest rates of local employment growth, for areas with at least 100,000 jobs in total in October, were in the Champaign-Urbana, IL metro, up 4.2% (+5,000); Rochester, MN, up 4.1% (+5,200); and the Stockton-Lodi, CA metro, up +3.7% (+10,200). Staffing agencies active across states and regions may wish to target these local areas with greater employment growth for potential business opportunities.

Overall labor force participation declined by 10 basis points, from 67.6% in October to 67.5% in November, and the prime age (25-54) labor force participation rate was steady at 83.5%, remaining historically high.

Aggregate hours worked in manufacturing recovered slightly from the strike- and hurricane-related October fall-off in November, advancing +0.4% M/M but down -0.2% Y/Y. Overtime likewise recovered, increasing +3.7% M/M and +3.1% Y/Y. Aggregate hours instead declined in the transportation and warehousing sector, down -0.7% M/M and -0.2% Y/Y. This may be related to the weakness in Retail trade. As aggregate hours in both the Transportation and warehousing sector and the Retail trade sector advanced on a not-seasonally-adjusted basis and declined on an adjusted basis, this suggests the holiday shopping season is slightly weaker in 2024 than it has been in recent years and/or due to the impact of Thanksgiving and Black Friday falling later in the calendar year than usual.

In June, we 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 the US economy showing solid growth 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. The just-released “advance” estimate of Q3 real GDP indicates an annualized growth rate of 2.8% in Q3, bringing the average rate through September to 2.5%. High-frequency estimates and “nowcasts” indicate continued strength in Q4, suggesting full-year GDP will be come in near this three-quarter average.

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.

Members may download this month’s jobs report or access our new interactive tool (beta) below: