June’s nonfarm payroll report produced a welcome sigh of relief. Despite employment figures for May that were even weaker than initially reported, June’s report showed a healthy gain of 287,000 workers overall, and a 265,000 gain in the private sector. While some of the headline figure’s strength reflected a rebound in information sector hiring as striking Verizon employees returned to work (a +28,100 advance in telecommunications payrolls in June almost offset a 32,000 loss in May), the composition of payrolls in the office-using segment suggests some degree of slowing. An average of the May and June 2016 payroll figures (Table 1 and Chart 1 on the following page) produces a gain in office-employment of 45,500, which is roughly 1/3 less than the average monthly gain in office employment over the April 2015 through April 2016 period.
Within office-using employment, average hourly earnings continue to advance at a pace in excess of private wages overall (3.9% year-over-year for information workers, 3.4% year-over-year for wages of financial activities workers, 2.6% year-over-year for professional and business workers vs. 2.4% year-over-year for wages of the total private sector as a whole). Nonetheless, employment growth in some of these sectors appears to be slowing as we enter the eighth year of economic recovery. Chart 2 on the following page highlights growth since June 2009—the official recession end. Computer systems design is the largest category of employment within professional and technical services at almost 2 million workers. While payrolls in this sector have grown at a healthy 4.3% annual pace over the last twelve months through June 2016, note that this rate is well below the 6.7% growth observed in the twelve months to June 2015. Even employment in management and technical consulting—a category that has grown by cumulative 35% since the start of the recovery—has slowed. Management and technical consulting payrolls exceed 1.3 million—a figure that has grown by 3.1% over the last year. However, this rate falls short of the 5.1% growth rate in the period June 2014 through June 2015. Payrolls may continue to rise, but at a decelerating rate.
Table 1. Monthly Change in Office-Using Payrolls by Category (000s, SA)
Chart 1. Office-Using Employment and Total Payrolls, June 2008 – June 2016 (Seasonally-Adjusted, 000s)
Chart 2. Professional and Technical Services, Sub-Sector Employment Growth, Indexed to June 2009 = 100