September 9, 2012 August marked another disappointing month for the U.S. labor market as the economy only added 96,000 jobs. However, the growth was just enough to edge down the nation’s unemployment rate to 8.1 percent. Private-sector gains were largely led by employment in food and drink places (+28,000), which has contributed 298,000 jobs over the past 12 months. Also performing well was professional and technical services, rising 27,000 this month due to gains in computer systems design (+11,000) and management and technical consulting services (+9,000).
As we head toward the fourth quarter and the November election, we expect to see more of the same when it comes to U.S. job growth for the remainder of the year. Although growth will likely still occur, we anticipate it being at a slower pace than many had hoped to see in the remaining few months of the year.
- Healthcare employment rose by 17,000 in August. Ambulatory health care services and hospitals added 14,000 and 6,000 jobs, respectively.
- From June through August, job growth in healthcare averaged 15,000 per month, compared with an average monthly gain of 28,000 in the prior 12 months.
- Within financial activities, finance and insurance added 11,000 jobs in August.
- The Randstad Employee Confidence Index was down by 0.8 points in August, registering at 51.6
- The Index measured just above the year low of 51.1 in June 2012
- There was a 24 percentage-point decline in employees who believe the economy is getting weaker in August
national employment trends
- Non-farm payroll added 96,000 jobs in August
- Private-sector payroll rose 103,000 in August
- Healthcare: +17,000; Retail: +6,000; Professional and business services: +28,000
- Government: -7,000 jobs; Federal: +3,000; State: -6,000; Local: -4,000
- Temporary help services jobs were down 4,900 in August to a total of 2,524,500 jobs.
- This represents a sequential decline of 0.2 percent and year-over-year growth of 8.9 percent.
- The temporary help sector has added nearly 780,000 jobs since growth restarted in September 2009
- The industry is off about 120,000 jobs from its peak in January 2007
manufacturing sector trends
Several concerning trends have materialized over the past few months that have many economists and political leaders preoccupied—one of which is a three-month slowdown in the manufacturing industry and the Institute for Supply Management’s closely watched manufacturing index dropping to 49.6 percent this month. This is a 0.2 point-decline from July’s reading, indicating contraction in the manufacturing sector for the third consecutive month and marking the lowest reading since July 2009. This decrease is likely to fuel growing concerns about the overall state of the economy.
Also, fewer summer layoffs at auto factories likely made the manufacturing hiring levels in July look artificially strong, which resulted in a pullback in auto jobs this month. On a positive note, consumer spending on autos is projected to improve according to economists polled by Thomson Reuters, rising to an annual rate of 14.2 million in August compared with 12.1 million vehicles on an annualized rate last August.
- Manufacturing employment edged down in August (-15,000). A decline in motor vehicles and parts (-8,000) partially offset a gain in July.
- Auto manufacturers laid off fewer workers for factory retooling than usual in July, and fewer workers than usual were recalled in August.
- The unemployment rate for the manufacturing sector stands at 7.3 percent, a vast improvement from last August when the unemployment rate was 8.9 percent.
consumer confidence levels decline slightly
The Conference Board’s Consumer Confidence Index declined this month, on the heels of an improved July showing. The Index, which currently stands at 60.6, declined from 65.4 last month and is now at its lowest level since November 2011. According to the Conference Board, one of the reasons for the decline was a more pessimistic outlook and more apprehension about business and employment prospects.
When it comes to consumers who are currently employed, the overall confidence levels remain virtually unchanged according to this month’s Randstad Employee Confidence Index. Measuring at 51.6 in August, the Index is slightly down from July – however, employees are overall more confident than this time last year. Compared to August 2011, confidence levels measured more than 10 points higher – indicating a much higher sense of optimism in the job market, the strength of the economy, and in their personal employment situations.
integrated mix of talent key to rebound & future success
Although the temporary staffing services sector was little changed this month, the sector has added close to 780,000 jobs since growth restarted in September 2009. The industry comprises approximately 2.5 million jobs at this time. This is in part due to a fundamental shift in the way companies are utilizing a variable workforce model. U.S. companies are beginning to view an integrated workforce not only as a stop-gap measure during recessionary or recovery periods, but more as a long-term, permanent approach to staffing.
In fact, a recent survey conducted by the Economist Intelligence Unit found that 67 percent of 479 senior executives plan to maintain “leaner” organizations by outsourcing work or hiring contract workers. And, labor law firm Littler Mendelson predicts that contingent labor could eventually comprise up to 50 percent of the U.S. workforce.