MARKET OVERVIEW
The Employment Situation: 'Back on a Troublesome Trend'
The unemployment rate ticked down to 4.2% in August, ending a four-month streak of increases, but still remains at one of its highest levels since the fall of 2021. This marks a 0.1% decrease from July and a 0.4% increase year-over-year.
JOBS ADDED IN AUGUST
The labor market added 142,000 jobs in August, falling short of the 165,000 number economists predicted but increased from revised June and July numbers.
DECREASE IN JOBS ADDED IN JUNE AND JULY
Employment numbers for July were revised down from 114,000 job adds to 89,000 adds, while June employment numbers were revised down from 179,000 to 118,000. With these revisions, employment in June and July combined is 86,000 lower than previously reported.
UNEMPLOYED PEOPLE IN AUGUST
The number of unemployed people dropped slightly from 7.2 million in July to 7.1 million in August, up 800,000 from a year earlier when it was 6.3 million.
Rusty Williams
Senior Director
"As we see the unemployment rate decline to 4.2%, it's clear the labor market is showing signs of resilience. But the downward revision of job gains in previous months reminds us of the volatility beneath the surface. Despite the challenges, we’re observing growth in niche areas, particularly for professionals with five to seven years of experience. Employers are looking to optimize their workforce, focusing on talent that offers immediate value without the high cost of senior leadership. This shift is driving demand for mid-career professionals, especially in specialized fields like cloud technology and AI, where the need for expertise remains high. Companies are also rethinking how to increase efficiency, often using AI and automation to streamline roles traditionally handled by larger teams.”
MARKET OVERVIEW
Staffing Industry Indicator
1
The September 2024 U.S. Jobs Report (published on September 6) estimates that employment in the temporary help services industry declined by 2,900 jobs in August, with a temporary agency penetration rate of 1.7%, unchanged from a revised 1.7% in July.
2
Temporary help services employment numbers for June were revised to a loss of 29,700 jobs, reversing an initial loss estimate of 22,600. July’s numbers were also revised from a decline of 8,700 to a loss of 18,100, reflecting an adjustment of 16,500 jobs.
3
Professional staffing hours were down 10% year over year in August, while the year-over-year gap for total staffing hours remain at one of the lowest levels since October 2022, at 7% below August 2023 numbers.
4
The Indicator showed consistency for professional staffing hours throughout August. The year-over-year decline is directionally in line with the decline in temporary help employment as reported in the Bureau of Labor Statistics’ monthly Employment Situation reports.
Bryan Bernard
Managing Director
“As we look ahead to the final quarter of 2024, the staffing industry is facing unique challenges that hiring managers should be mindful of. The recent dip in temporary help employment, coupled with a revision to the jobs data showing steeper losses than initially reported, underscores a cautious hiring landscape.
However, stability in professional staffing hours signals a demand for specialized roles remains steady, despite broader declines. It's critical for businesses to adapt their talent strategies—especially with promotions and merit increases falling short of expectations this year. Employers who balance flexibility with strong in-person engagement, while also offering competitive compensation packages, will be better positioned to attract and retain top talent in this evolving market.”
MARKET OVERVIEW
Recession Watch 2024
'The labor market is cooling'
Concerns about a slowing labor market grew after ADP’s August report showed the weakest private job growth since 2021. The August jobs report, however, provided a mixed picture. While the unemployment rate slightly improved to 4.2% from 4.3% in July, job growth missed expectations. Economists remain hopeful for a soft landing, though the labor market's current pace is nearing "stall speed," according to Nick Bunker from Indeed Hiring Lab. Despite these signals, there's no clear sign of an imminent recession, and the Federal Reserve may hold off on aggressive rate cuts for now.
Sources: Yahoo Finance - The jobs report answered one key question—but left us guessing on another, Yahoo Finance - Private sector tallies lowest monthly job gain since January 2021
U.S. economy regains speed in second quarter; consumer spending increased solidly in July
- The U.S. economy grew faster than expected in the second quarter amid solid gains in consumer spending and business investment. While inflation pressures continued to ease through July, expectations remain for a September interest rate cut from the Federal Reserve.
- The U.S. economy grew at a 3.0% annualized rate in the second quarter, according to the Commerce Department’s revised GDP report, up from the previously estimated 2.8% and more than double the growth rate of the first quarter.
- Consumer spending increased 0.5% in July, maintaining the strength from a 2.9% annualized rate in Q2. Spending remained strong across goods and services, with outlays on motor vehicles and parts leading the charge. Consumers also spent more on housing and utilities, food and beverages and recreation services.
- Although labor market momentum has slowed, wage growth remains decent, supporting consumer spending. The slowdown is attributed more to a decrease in hiring rather than layoffs.
- The core personal consumption expenditures price index, a key inflation measure, rose 0.2% in July and is up 2.6% year over year.
Kyle Allen
Executive Vice President, Sales & Recruiting
“Hiring managers today are facing a delicate balance between maintaining workforce momentum and adjusting to economic signals. While job growth has slowed, the demand for skilled talent remains resilient, especially in critical sectors like accounting, finance and technology.
Hiring strategies need to remain flexible—companies may benefit from adopting a more agile approach, blending contract work with permanent hires to meet fluctuating needs. The real challenge lies in anticipating shifts in the market and adjusting hiring models accordingly to remain competitive while ensuring business continuity.”
