Tuesday, December 8, 2009

Temporary Help as a Predictor of Broader Hiring

Bloomberg reported:

The worst U.S. employment slump in the post-World War II era may be about to end as companies hasten to hire temporary workers and boost hours, according to economists such as John Ryding and Zach Pandl.

Employers took on 52,000 temporary workers in November, the largest increase since October 2004 and the fourth consecutive gain, the Labor Department said today. The average workweek climbed by 12 minutes, the most since March 2003.

“It is beginning to look like December could be the first month to show a positive payroll print,” Ryding, chief economist at RDQ Economics LLC in New York, said in a telephone interview. “Companies are running out of labor.”

Jumps in temporary help and working hours often presage the addition of permanent, full-time staff as companies grow more confident sales will be sustained. Job growth would help lift consumer spending, the biggest part of the economy, and aid the recovery from the worst recession since the 1930s.

This cycle may be slightly different as employers delay the full-time hiring due to uncertainty and quite frankly an ability to get top talent "on the cheap" on a temporary basis. Still, a nice sign on the margin.

Source: BLS

1 comment:

  1. I'm curious why you are using a 6 month rate of change considering the extreme seasonality of the temporary workers data set. I have posted a non seasonally adjusted graph on my blog and as you can see the number of temp workers varies dramatically month to month even during a 'normal' economy.


    Only after we see the trough of temporary employment in 2010 (in the spring) will we be able to determine if we are in an upswing yet.