Temporary Help Services Employment Down 27%
By Barry Ritholtz - April 3rd, 2009, 11:29AM
NFP day continues apace here at TBP, as we separate that which leads out from the lagging portion of the employment data.
For that, we go to Bruce Steinberg’s monthly U.S. Employment Situation podcast, whose bailiwick is the temporary help component:
“Temporary Help Services Employment was 1,816,800, or down 3.8%, from the previous month. Year-to-year loss was nearly 27%. Since December 2006, Temporary Help Services has lost more than 850,000 jobs, or 32 percent. And Temporary Help Services continued to lose market share (percent of all jobs) — it was 1.37% of all jobs in March; the last time it was so low was February 1994. It was 1.8% a year ago.”
Good stuff — thanks Bruce.
>
Temporary Help Services
Chart courtesy of Bruce Steinberg
April 3rd, 2009 at 11:41 am
Yup. As companies cut their costs to zero, stocks should soar!
April 3rd, 2009 at 11:44 am
I see nothing but bad news today, yet the market’s holding up. What gives? Are we in another one of those fake “this is all priced in and it’s good to see the market’s ignoring bad news” moments?
April 3rd, 2009 at 11:45 am
Riddle me this: If people are losing jobs at a rapid clip and have no money to spend, where does the recovery come from? More easy credit that will ultimately be defaulted on again? Is that it?
April 3rd, 2009 at 11:57 am
That’s the ticket. The only part of the economy that will recover is the truly indispensable component. Energy and materials and the best of our technology companies will probably do OK. Financials and consumer discretionary are going to have a dead cat bounce – these industries will have a hard time generating growth and the stocks will suffer, especially when investors realize that even when the pace of job losses finally slows, this will not be a recovery associated with a lot of job creation. Even if jobs are created, they will be low paying.
So, persistent high unemployment and under-employment, then + some inflation = Misery Index.
April 3rd, 2009 at 12:07 pm
I think I’ve got it figured out. Much of this rally has been counterintuitively fuelled by deleveraging- forced buy-ins from hedge funds facing redemptions. This could go on for quite some time, just like forced selling last fall.
April 3rd, 2009 at 12:10 pm
Who the EFF is buying this market NOW? I know I’m talking my book but that seems insane to me.
April 3rd, 2009 at 12:15 pm
There are those arguing government spending will pick up the slack long enough to power us through a recovery. Personally, I don’t see it.
What I see are the politically and financially well connected hoarding the govt spending, effectively dropping the “money velocity” to insignificant levels. What does trickle down to “discretionary consumption” won’t be enough to counterbalance the continuing carnage.
Someone needs to take a closer look at personal income by brackets to track this as it unfolds. On the one hand I hear BO touting juicing the middle class and creating jobs, and cutting their taxes. On the other I see the feds willing accomplices to demanding more union concessions, and all the Davis Bacon government construction contractors still intent on breaking the construction unions, and dropping hourly wages by 20-30% as often as they can as we speak. Don’t be surprised if BO does not watch benignly while the DEMs dismantle Davis-Bacon. IMplicitly or explicitly. And that’s one of the few key sources for “middle income” employment. Sad but true.
As I have suggested before BO wants to brag about stimulus job creation, but does not want to measure it, which could be done easily enough. Therein lies the deception.
April 3rd, 2009 at 12:19 pm
Barry,
Weren’t you big on emp/pop ratio?
The Employment/Population ration is 59.9 percent. Economists at HSBC point out that the ratio has not been that low since July 1985.
(ht John Jansen at across the curve)
April 3rd, 2009 at 12:32 pm
Buy some FAZ today below $17.5; sell next week above 20.
April 3rd, 2009 at 12:36 pm
I am FAZing today, but I won’t sleep with it.
Too dangerous as long as Tiny Tim works weekends.
Not averse to a spot of QID or SDS however.
April 3rd, 2009 at 12:40 pm
BR: It is Friday. My sense if you lapse again on FNJ you’ll hear about from “you know who”, the famous west coast trader. :>)
April 3rd, 2009 at 12:41 pm
usphoenix @ 12:15
“…while the DEMs dismantle Davis-Bacon. …that’s one of the few key sources for “middle income” employment. Sad but true”
The rise or fall of unions creates winners and losers…. among the middle class. The majority of middle class workers don’t benefit from unions.
April 3rd, 2009 at 12:55 pm
DL,
The majority of middle class workers EXIST because of unions. Learn your US history from 1870-1950.
Barry,
How has the way that employment has changed affected how we should interpret this data? Isn’t it true that the “Bush Recovery” after the 2003 recession was essentially a jobless recovery? Isn’t it true that employers of all kinds didn’t hire on career people, but instead they relied on “permanent temporary” workers?
April 3rd, 2009 at 12:58 pm
Seems we’re seeing more of this type of behavior lately. Examples of society fraying around the edges. Not good…..
http://www.nytimes.com/aponline/2009/04/03/us/AP-Hostage-Shooting.html
April 3rd, 2009 at 1:01 pm
franklin411 @ 12:55
A lot has changed since 1950; a lot has changed since 1970.
April 3rd, 2009 at 1:04 pm
@DL: For sure, but much of it can be debated as to whether or not those changes have benefited the middle class, no?
April 3rd, 2009 at 1:07 pm
I think the market may no longer be a barometer of the US economy. The market may be becoming a barometer of the World Economy. The US can obviously go further in the hole while the market does OK, due to growing business outside the US. Many Corps take exception to even being called US companies anymore, they consider themselves International companies based in the US. They could give a rats ass about the US and its people or where the revenue comes from.
I may call Rosetta Stone today and order Mandarin Chinese.
April 3rd, 2009 at 1:10 pm
Mannwich @ 1:04
If a construction worker in a union is making a premium wage, I don’t see how that helps some guy in a cubicle making $50K/year.
I’m all in favor of prosperity; my point pertains to the “zero-sum” nature of union wages.
April 3rd, 2009 at 1:12 pm
DL,
Actually, for the average worker, we’ve come full circle. We started off with virtually no economic security or mobility for workers from 1870 to the 1910s. Then from 1910-1950 (with a brief retrenchment in the 1920s) unions worked with a sympathetic government to increase protections for workers so people didn’t have to worry about, say, breaking an arm and being completely and utterly ruined economically. Unions were also able to increase wages, so it was possible for most of our grandparents and great grandparents to escape what we would call today the status of “working poor.” That generation was also able to send its kids to college at an unprecedented rate. The result was the longest period of economic prosperity in world history.
Then, starting in the 1950s, people of wealth started to fight back. They used anti-communism as a bludgeon to tarnish unions and scrap protections for workers, and unions have been on the wane ever since. Who knows if we’re at the peak of that cycle, but the fact remains that today’s American worker has been virtually returned to the status he occupied 100 years ago: He’s a cork in a sea of risk, jostled by forces beyond his control, with no hope or ability to get ahead in life.
April 3rd, 2009 at 1:21 pm
DL Commented:
“The majority of middle class workers don’t benefit from unions.”
________
But those in the unions do.
The middle class is hell bent on self destruction. Why in the world would anyone in the middle class rail against political and economic processes and policies designed to protect their interests? How did a political system that taxes the wealthy super-minority minimally, at the expense of the vast middle class, come to get middle class support?
April 3rd, 2009 at 1:22 pm
@DL: You may not like today’s unions but it’s those Unions that = Bargaining Leverage, something that corporate execs have in spades due largely to the “agency problem” (hence their out-sized pay packages that became the norm). The middle class worker without the group has little to no real power largely because he/she has little bargaining leverage. Middle class people/jobs are viewed today as a fungible commodity. Combine that aspect with high debt loads (e.g. debt slavery), and the worker has virtuallyNO leverage to hold out for higher sums of pay. He/She is forced to basically take whatever their companies offer (and hey, they get access to cheap credit, so it’s all good, right?). As a result, most of the productivity gains that we’ve seen in recent years that were mostly produced by those very workers have flowed upward to the top of the food chain (e.g. the executive suite, where the real bargaining leverage sites). This could not and cannot go on forever without some sort of a backlash. We’re seeing that tide rise a bit now.
April 3rd, 2009 at 1:26 pm
franklin411 @ 1:12
“today’s American worker …[is] a cork in a sea of risk, jostled by forces beyond his control”.
I would agree with that.
April 3rd, 2009 at 1:26 pm
@Marcus Aurelius: “How did a political system that taxes the wealthy super-minority minimally, at the expense of the vast middle class, come to get middle class support?”
By stupidly allowing our political and corporate elites to distract us with social wedge issues that don’t even generally directly our day to day lives. Divide and conquer has been the name of the game and it’s worked to a “t” for the elites over the past few decades. Instead of battling for sharing the spoils of productivity gains with their corporate masters, the middle class got duped/distracted into battling with one another for the remaining scraps and over nonsensical type issues.
April 3rd, 2009 at 1:29 pm
Mannwich Said:
April 3rd, 2009 at 11:45 am
Riddle me this: If people are losing jobs at a rapid clip and have no money to spend, where does the recovery come from? More easy credit that will ultimately be defaulted on again? Is that it?
reply:
——————–
Someday, eventually, later, the stimulus package they have been talking about so much in the news will slowly grow an appendage that has something to do with infrastructure jobs. That’s supposed to have something to do with a recovery, or so they say.
April 3rd, 2009 at 1:33 pm
DL,
Workers, today, benefit from the threat of unionization more than the actual union. Without the threat of unions, avaricious management would screw over anyone and everyone just to get a better parking spot and a few bucks a year more. Don’t kid yourself.
April 3rd, 2009 at 1:36 pm
Mannwich:
I also think it has to do with marketing economic help for the lower/lowest classes as expenses rather than investments (middle-class outrage at the system that elevated them to middle class in the first place – a.k.a Reaganomics). Historically, and as is evident, the best and brightest are not begat by the best and brightest. Tomorrow’s leaders and geniuses will emerge from the relative obscurity of the huddled masses. Always have, always will.
A well, educated, well fed, healthy population, with societal safety nets, is, arguably, always in the best interests of society.
April 3rd, 2009 at 1:38 pm
I acknowledge that unions have had their share of contributions to modern society. The 40 hr workweek, worker safety, and no child labor are all GREAT things. The problem with unions is that they have long since expanded beyond basic rights into entitlements. I DESERVE a job for life. I DESERVE a pension after 25 years of service. I DESERVE to get paid the same as others of the same tenure regardless of productivity, work ethic, etc.
Many long for the golden age on union jobs where one only needed a high school education to earn enough to support a family of four with a 1500 sq ft ranch and two cars in the driveway. I’m sorry, but that will NOT happen again for a long time if at all. Surely it didn’t hurt our industries that most European industry had been destroyed by WWII and took decades to catch up and that during that period, most of the world’s population lived in abject poverty.
Nowadays, we are competing with Western Europe, an emerging Eastern Europe, China, India, SE Asia, and so on and so forth. Pro-union policies at this point will only help perpetuate American mediocrity and allow competitors to eat our lunch more easily.
HCF
April 3rd, 2009 at 1:39 pm
@Marcus Aurelius: “How did a political system that taxes the wealthy super-minority minimally, at the expense of the vast middle class, come to get middle class support?”
———–
By brainwashing people into believing that they had a chance of getting to the top. And the debt that got them the toys gave them the illusion of moving up. Meanwhile, each dollar spent on the toys made the wealthy even wealthier.
It’s called the illusion of capitalism and the fear of communism.
April 3rd, 2009 at 1:44 pm
@HCF: Here’s the thing – there’s FAR more entitlement (and far more expensive) at the top of the food chain in the executive suite and on Wall Street (as we’ve seen recently in stark detail). Why aren’t you more exorcised by that? It seems you’re falling prey to their very strategy and unless you’re in that rarefied air, why not focus your attention on that far more egregious injustice that is partially responsible for where we are today?
April 3rd, 2009 at 1:53 pm
Mannwich @ 1:44
I would agree that the “fat cats” in the executive suite are getting far more than they deserve. But I’m not sure that unionization is going to result in less money for the fat cats. The way I see it, much of the gains by union workers will occur at the expense of non-union (middle class) workers. For example, if Walmart, Target and the other big retailers are forced to pay much higher wages, a lot of that increase will have to be absorbed by the customers.
April 3rd, 2009 at 1:57 pm
@Mannwich:
> there’s FAR more entitlement (and far more expensive) at the top of the food chain in the executive suite
ABSOLUTELY… I am actually more appalled with the entitlement at the executive level… I should make that completely clear. I don’t think we should tolerate mediocrity at any level. Current corporate structures make it such that executives at many companies get paid absurd bonuses REGARDLESS of performance. Why the hell does the Chesapeake Energy CEO get $75M after the stock fell about 80% last year? WTF? Hell, I think I can lose about that much money for half the price….
I guess I have to admit that I am just self interested… Just a lowly engineer who works hard , has excellent credentials, but is neither covered by the pension of a mediocre unionized assembly line worker, nor the golden parachute of an incompetent executive. Alas, it’s like middle child syndrome!
HCF
April 3rd, 2009 at 2:02 pm
DL Said:
April 3rd, 2009 at 1:53 pm
For example, if Walmart, Target and the other big retailers are forced to pay much higher wages, a lot of that increase will have to be absorbed by the customers.
reply:
—————
But if you could create a permanent underclass, they would work for even less than what they work for today. Maybe this is the RoboCop vision of society. Things would cost even less for you and all others who are not in the lower caste. At what point do you decide where ‘high wages’ for unskilled labor begins? To someone, anything better than debtor prison is probably proof of a welfare state. Maybe this was the long term strategy of the modern Republican Party?
DL, to you, where is a good wage level for those people? Would worker desperation be the main criteria to figure it?
April 3rd, 2009 at 2:05 pm
I find it very helpful when watching intraday moves of the market to monitor the comments of the best blogs to gauge “investor” sentiment vs. http://www.stocktwitscom crowd which pratically all daytraders. The stocktwits group doesn’t look for reasons for a move they just know – its up = buy FAS, it’s down = buy FAZ. It’s really quite funny to watch.
April 3rd, 2009 at 2:10 pm
I agree with both Mannwich, and DL, Lets cook the fat cats in the executive suites and feed them to the poor non-union middle class. “Just a spoonful of sugar helps the medicine go down!”
April 3rd, 2009 at 2:14 pm
@bman:
> I agree with both Mannwich, and DL, Lets cook the fat cats in the executive suites and feed them to the poor non-union middle class.
So feed the non-union middle class a Mannwich sandwich?
=) HCF
April 3rd, 2009 at 2:15 pm
Until global wage disparities are properly addressed (could be waiting a while), these problems will only persist. Globalism and free trade have been quite lucrative for the elites, for sure. Why do you think we always hear mainly about how wonderful globalism and free trade are for everyone? Consider the source of those reviews. Sure, it’s been great for THEM (fantastic, in fact, life couldn’t be better), but for the other half without a voice who know better based on their day to day lives? I think not so great. Big disconnect there.
April 3rd, 2009 at 2:16 pm
bman:
That you say, “Lets cook the fat cats in the executive suites and feed them to the poor non-union middle class,” is a call to unionization in and of itself. “Lets” in implies collective effort of our class to stand against the entrenched interests. The power of numbers is the only power the majority has, and unity driven by mutual benefit is the key to wielding it.
April 3rd, 2009 at 2:18 pm
dead hobo @ 2:02
You want to raise someone’s wage, fine. Just tell me where the money is going to come from, and how realistic it is that you’ll be able to get the money from the people that you want to take it from.
April 3rd, 2009 at 2:20 pm
@DL: I think we take it from the executive suite. Where do you think the productivity gains in recent years have come from and then to?
April 3rd, 2009 at 2:21 pm
Today is a drag. Should have stayed in bed.
April 3rd, 2009 at 2:24 pm
Agreed. I’m off to take the dog for a walk. A nothingburger of a day, except my short ETF’s getting slaughtered! Someday the rally will end. Hope I’m not broke by then!
April 3rd, 2009 at 2:27 pm
DL Says:
April 3rd, 2009 at 2:18 pm
dead hobo @ 2:02
You want to raise someone’s wage, fine. Just tell me where the money is going to come from, and how realistic it is that you’ll be able to get the money from the people that you want to take it from
reply:
——————–
Wages will be set by the invisible hand if the game is fair.
Mannwich,
As long as I can continue to get cheap stuff, I will vote in favor of the concept of comparative advantage. The problem with cheap overseas stuff is that the past several years here at home were dominated by people who made money by playing hot potato with bad financial paper, rather than by inventing and making things. You sound like you are competing for the bottom rung rather than trying to climb off of it. I prefer to let cheap labor do what it does best. Here, we should concentrate on fixing the economy so that others get the jobs we don’t want because we keep the good jobs here.
April 3rd, 2009 at 2:30 pm
@dead hobo: Conceptually I don’t disagree with you but what “good jobs” do you speak of in our service-based economy where most of those bubble jobs are gone and probably not coming back (for good reason)? Where and what industry are these “good jobs” going to come from in such an economy? That’s the conundrum now is it not?
April 3rd, 2009 at 2:33 pm
Mannwich,
Unfortunately, they no longer exist. Some would probably be here as a matter of economic evolution if the economy had not been mismanaged so much during the GWB era. We have to start over to a substantial degree. That fucker ruined a lot.
April 3rd, 2009 at 2:41 pm
@Grindstone: What site is it you are referring to? There are people dumber than we are?
http://www.stocktwitscom ???
April 3rd, 2009 at 2:45 pm
LB, might not have been such a drag if you’d listened to me, lol. Sorry, couldn’t resist. Although gold is not nice today. Buy some at the close.. ugl under $31 would be great… gdx under 34.60, looks good to me as well. 3 pts less than i sold yesterday.
April 3rd, 2009 at 2:45 pm
leftback, your April cascade event is late.
April 3rd, 2009 at 2:50 pm
@cjcpa
That’s around the week of April 19.
April 3rd, 2009 at 2:51 pm
my bad…..
April 3rd, 2009 at 2:55 pm
Daily trend changed to up back on 3/10/09. Weekly trend has been down but if we close above 825.88 then it will have turned up but not yet confirmed. Need to close above 968.75 to change the monthly trend (currently down).
So this rally may have more legs before the correction begins. IMHO.
April 3rd, 2009 at 3:09 pm
@cjcpa: That’s around the week of April 19.
I have no idea. This pup could scream all the way to 999.99 for all I know.
But it’s coming down.
April 3rd, 2009 at 3:24 pm
leftback @ 3:09
This pup isn’t going one tick above 999.98
April 3rd, 2009 at 3:47 pm
@DL: You’re right there.
Picked up a pile of gold miners. I reckon someone is going to want those one day next week.
Today was BS. This market has clearly turned sideways.
The Leftback Top has yet to be breached.
April 3rd, 2009 at 3:50 pm
LB @ 3:47
Let’s hope the market doesn’t go topless.
April 3rd, 2009 at 4:42 pm
“The result was the longest period of economic prosperity in world history.”
You’re confusing correlation with causation. What really caused the prosperity? Unions? Or American world hegemony? Or the price of eggs in China? Or the rooster causing the sun to come up?
It’s why you should never view history through the lense of political biases.
April 3rd, 2009 at 8:44 pm
I told you guys before; need a job, know someone who does? Get on with the Census. Double digit per hour pay, .55 a mile, flexible schedule, and temporary employees will work through June of 2010 at best. I worked as the trainer for this county in 2000 and this time I’m a recruiter. Once you lose this job ( by layoff) you can apply for unemployment. Could help carry some people through next year when according to our government; all will be well. OMG, run don’t walk to your phone and call 866-861-2010 today. lol