One of the most closely watched employment report in years came in this morning showing hiring in August was lower than expected. The Labor Department said employers added 173,000 new jobs last month, almost 50,000 fewer than economists were expecting.
Temp hiring returned to positive territory during the month, adding 10,700 workers on a seasonally adjusted basis. In July, the temp sector shed a revised 9,200 jobs. Despite August’s improvement, the slowdown this year in temp growth is clear. Since January, the temp workforce has grown by 44,400 workers, less than half the 98,900 for the same period in 2014. Temp agencies now employ 2.91 million workers.
On an unadjusted basis, the temp workforce in August stood at 2.95 million, a gain over July of 61,700 jobs.
Executive search firms had 39,700 employees in July, the most recent number available from the Labor Department’s Bureau of Labor Statistics. Placement agencies counted 284,100 workers while PEOs had 360,900.
The national employment figures were more closely watched than usual, because of the upcoming Federal Reserve Board meeting in two weeks. The Fed is considering whether to hike interest rates for the first time in almost a decade, and the employment picture is a key factor in the decision. A weak report might have encouraged the Fed to delay hiking rates.
Because the Bureau of Labor Statistics gathered the jobs data before the sharp drops in the stock market last month, the impact, if any, is not reflected in this morning’s report.
Though new job creation was the lowest since March, other parts of the report pointed to a strengthening economy. The unemployment rate fell to 5.1% from July’s 5.3%, the lowest level since April 2008. Hourly nonfarm earnings rose by 8 cents, a rate of .3% which was more than expected.
Due to seasonal factors, August’s report is among the more volatile of the year. The New York Times noted that the Labor Department’s initial August numbers are revised upward by an average of 79,000.
The biggest gains in August came from hiring in education and healthcare. Government education hiring surged as 22,900 new jobs were added to national payrolls. Healthcare increased by 40,500, with hiring by ambulatory services such as doctors’ offices and home health care, adding 21,100. Hospitals added 15,900.
Thee wee also significant gains in jobs at bars and restaurants (+26,100), financial services (+19,000), and in professional and technical services (+14,500), a sector that includes computer services and management and technical consulting. Temp grew by 10,700.
Manufacturing lost 17,000, most of that coming in the non-durable goods area where food manufacturing was off by 6,500 jobs.
Unlike in previous months when the unemployment rate declined because people gave up looking for work and dropped out of the labor force, in August more unemployed found jobs. The labor force participation rate was unchanged at 62.6%.