US temp jobs fall by 21,000, weakest overall job growth since 2010
Jun 03, 2016
The number of US temp jobs fell by 21,000 in May from April, according to seasonally adjusted data released today by the US Bureau of Labor Statistics. Temp jobs edged up only 0.6% year over year, continuing the decline in year-over-year growth rates and the smallest increase in years.
“Though the signs of impending trouble have been building throughout the first half of 2016, this month’s report would seem to mark a particularly negative inflection point,” said Andrew Braswell, CCWP, senior research analyst at Staffing Industry Analysts. “Both the total nonfarm jobs growth (up 38,000) and the year-over-year temporary employment gain (up 0.6%) in May were the weakest reported since 2010.”
Today’s revised data also decreased April’s previously reported gain of 9,300 US temp jobs to a gain of 5,000.
The temp penetration rate — temp jobs as a percent of total employment — edged down to 2.002% in May from 2.017% in April.
For total nonfarm employment, the US added just 38,000 jobs in May. Employment increased in health care. Mining continued to lose jobs, and employment in information decreased due to a strike; about 35,000 workers in the telecommunications industry were on strike and not on company payrolls during the survey reference period.
Reuters reports the economy created the fewest number of jobs in more than five years in May as employment in the manufacturing and construction sectors fell sharply, suggesting a deterioration in the labor market that could make it harder for the Federal Reserve to raise interest rates.
Bloomberg reports the increase fell far short of the median forecast in its survey of 90 economists, which called for a gain of 160,000 jobs.
“The slowdown in job growth looks pretty pervasive across industries,” Bloomberg quoted Michael Feroli, chief US economist at JPMorgan Chase & Co. in New York, as saying. “It raises some questions about the momentum of growth and about the outlook. The easy thing to say is, this takes June off the table for a Fed hike. To get to July, we’re going to need a pretty nice rebound in the data.”
The US unemployment rate edged down to 4.7% in May from 5.0% in April. The college-level unemployment rate — which can serve as a proxy for professional employment — remained at 2.4%.
The Conference Board expected job growth to slow, but not that much, according to Gad Levanon, its chief economist for North America. He also noted the weak payroll report may deter the Fed from raising rates this summer.
“The weakness in job growth in May was across many industries, and especially noticeable was the large drop (21,000) in the temporary help industry,” he said.
“Given the drop in corporate profits and investment in recent quarters, it was surprising that job growth held up so well until now,” Levanon said. “But even though the days of 200,000-plus average monthly job growth are probably over in this expansion, we don’t expect job growth to remain below 100,000.”
The drop in the unemployment rate to 4.7%, below estimates of the natural rate of unemployment, also surprised Levanon. “Faster wage growth is likely to partly offset the slowdown in hiring, and maintain moderate growth in household income and consumption for the rest of 2016,” he said.