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Wednesday, September 8, 2010

Employment: Is this Time Different?

Motoko Rich at the NY Times Economix details:

Starting last winter and into this spring, the hiring of temporary workers surged, giving hope that companies were poised to convert those hires to permanent ones.

Of course we know by now that the economic recovery has hit a rough patch, with private sector hiring only just remaining positive.

Temporary hiring has slowed as well, although it was actually one of the stronger performing categories in the monthly snapshot of labor statistics released by the government last Friday. Temporary help services added 16,800 jobs, out of a total of 67,000 private-sector jobs added on net in August.
As can be seen below, the number of part-time workers as a percent of the total private workforce spiked at the start of the recession, but the level has since stagnated.

Unfortunately, the stagnation has not necessarily been due to a spike in the denominator (i.e. the level of private employment). At least it still appears to me that the bottom has been found.

After such a large fall, it is worrying that there is still so much uncertainty over how long (or if) the recovery will take:
The subdued picture on temporary hiring adds to the uncertainty that is gripping the economy, with everybody trying to guess whether the slowdown in hiring is a prelude to a halt or even a backslide, or merely a pause before a pickup.

“We would have expected nine to 12 months after the turn of the economic cycle, is when you’d start seeing jobs coming back in a more substantial way,” said Jonas Prising, president of the Americas for Manpower Inc., one of the largest temporary hiring firms. “We’re not seeing that. So then the question is, is it just delayed by another six months because of some issues we faced in this recession that are different than most other recessions, or have some things changed structurally? I think the jury is out.”
Source: BLS