The US added 5,800 temporary jobs in February, according to seasonally adjusted numbers released by the US Bureau of Labor Statistics. Temp jobs were up 2.24% in February compared to the same month a year ago.
In a revision to the previous month’s data, temp jobs fell by 11,500 in January instead of the previously reported gain of 1,000 temporary jobs; however, December’s gain was revised upward to 13,500 from the prior estimate of 7,900.
The temp penetration rate — temp jobs as a percent of total employment — was 2.03 in February compared to 2.02 in January.
“While the headline growth of 5,800 jobs may not seem disappointing, it is more than offset by the downward revision to January,” said Tony Gregoire, research director at SIA. “Given that the temporary staffing numbers are not only choppy on a monthly basis, but also often substantially revised one or two months later, it is best to take at least a three-month average, which gives modest growth of 2,600 per month. A four-month average gives 2,300.”
In terms of total nonfarm jobs, the US added 20,000 jobs in February for a total of 150.6 million. The unemployment rate fell to 3.8% in February from 4.0% in January and 3.9% in December. The unemployment rate for college graduates — which can serve as a proxy for professional employment — fell to 2.2% in February from 2.4% in January; however, it edged up from the 2.1% rate reported for December.
The biggest surprise in February’s jobs report was the meager gain in total nonfarm jobs, just 20,000, according to Gad Levanon, chief economist, North America, The Conference Board. But this number reflects a bounce-back from the job gain of 311,000 in January.
“The average of the two months, 165,500, better reflects the current trend in employment growth,” Levanon said. “At this point, our forecast is still for a gradual slowdown in job growth during 2019.”
Another important message from this report is the continuing tightening of the labor market. U6, which is the broader measure of labor market slack because it includes workers who are part-time purely for economic reasons, is now at 7.3%, the lowest rate since January 2001, and down 90 basis points in the last 12 months. “Most importantly, wage growth continues to accelerate. In the last 12 months, average hourly earnings grew by 3.4%, versus 2.6% in the previous 12 months,” Levanon said.
As the labor market continues to tighten, wages and labor costs will continue to accelerate, creating inflation pressure, according to Levanon. With the economy and business revenue growth slowing, profits will be squeezed, forcing businesses to become more efficient. “This may already be happening, judging by the improvement in labor productivity reported earlier this week.”
Source: Staffing Industry Analysts