The “temp jobs lead employment” line (a truism, to be sure) has been floated since that series began to turn up about ten months ago.  And, in fact, we have seen almost a year’s worth of growth out of the temp services series which, admittedly, could go on for a while (if, say, we get a repeat of what we saw in the 90s).

But here’s the thing:  Temp jobs are now up 19.6% year over year, a record for the series going back to 1990 (when BLS began tracking it).  Private sector jobs less temp jobs are still down 0.7% year over year.  Historically — and I’ll admit going back only to 1990 isn’t a particularly robust data set — when temp jobs are up over 10% year over year, private sector jobs (less temp jobs) are running in the range, on average, of +2.4% YoY,  not -0.7%.  In the 20 year history of the series, never has the year over year gain been 10% or more while the private sector (ex-temp) has been negative.  This is yet another variation on the theme of whether this may be As Good As It Gets.

The following chart shows the relationship:

 
Again, we may have a problem on our hands as the growth in temporary jobs has run away from the growth of the private sector.  Now, temp jobs could continue setting YoY records — I wouldn’t rule that out at all.  However, we do need to see the private sector start to kick into gear and play some serious catch up.  As I’ve groused many times before, we’re starting to see late-cycle prints in some series, and we’ve barely even begun to put people to work.  Very troublesome, to say the least.

Category: Data Analysis, Employment

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

25 Responses to “A “Temporary” Gap? Let’s Hope So.”

  1. Excellent post. I alwyas enjoy keen observations on esoteric data.

    When can we unmask Invictus?

  2. curbyourrisk says:

    The problem is how the data is reported. If the Government issued it, its manipulated.

    I know many friends who were un-employed in the last 8 weeks that were census takers. They have lost thier jobs a few times and always called backed and rehired. Something is wrong with that.

  3. Bokolis says:

    These kids in their mid to late 20s are far less inclined to take shit from their employers (and, let’s face it, wage slaves have been put through tons of it over the last 2+ years…it’s a hell of a long time to be playing defense). Anecdotally- because Bokolis knows more poeple in their 20s than most of you- they are quitting left and right without blinking an eye.

    The kids would rather dip the toe as temps because it’s more convenient and involves less commitment (and because they can’t suffer asshole bosses for long). The companies don’t have as much choice.

    A byproduct of cutting staff to the bone is having to hire up. Guess who is out there? Those kids above, who were chopped in the first round, and out of work VPs, who got clipped in the second round.

    When employers expect prosepcts to research the shit out a company to the point where they can issue a rating, only to run them through an interview gauntlet with ill-prepared middle managers, those that would actually do it would come to the reasonable conclusion that, for most companies, an “underweight” rating would be generous.

  4. call me ahab says:

    When can we unmask Invictus?

    it’s Morgan Freeman-

    where’s my prize

  5. Thor says:

    Curb – Wow really? You know several unemployed friends who were hired, fired, and then re-hired as census workers? I wonder what the odds are of that.

  6. Petey Wheatstraw says:

    There are plenty of jobs available in America. Here’s an application, and they’re hiring immediately:

    http://www.ufw.org/toj_play/TOJNEW_12_JAL.html

  7. KentWillard says:

    “In fact, the single biggest distinguishing feature of the recent economic expansion has been the tendency of businesses to rely on a growing complement of cheap part-time and temporary workers instead of recruiting regular employees, even while maintaining wage levels for the regular employees already on their payrolls. Between 2000 and 2007 the number of regular employees fell by about 1.9 million, while nonregular workers increased by about 4.5 million.” – regarding Japan’s labor market
    http://www.japanecho.com/sum/2008/350303.html

    This, along with the hoarding of cash by corporations and zero interest rates, is eerily similar to Japan. The uncertainty in consumer demand, and the uncertainty of future corporate debt financing, is keeping long term investment low.

  8. Invictus says:

    @KentWillard

    That is a fascinating link. Thank you.

  9. dsawy says:

    Quite understandable from the perspective of the employer. They’re uncertain of the economy, they’re uncertain of the regulatory environment, they still don’t have a durable recovery in sales.

    Why would they want to add employees who are a) high in permanent cost and b) hard to let go if we slip back downhill?

  10. curbyourrisk says:

    Thor: They were let go as census workers, only to be called back and rehired. The let go again and rehired. I bet each time they were rehired on Long Island it counted as a job created. Yeah…really, I know several. What was your point anyway?

  11. Invictus says:

    @curb (and Thor)

    Census workers would not have been captured in the data I’m using here in any event, regardless of how many times they were hired and fired.

  12. The Curmudgeon says:

    @KentWillard, excellent observation.

    Why temp jobs? Because a) uncertainty prevades business’ prospects; b) temp workers are not only easier to get rid of, but are also cheaper (labor price declining w/ demand) in terms of straight payroll expenses and in terms of paperwork burden. Well, usually.

    Anecdote: I hired a temp worker a few years back to help out in my title agency. She was with me about two weeks when I had to fire her for smoking pot every day at lunch and coming back so stoned she couldn’t type. She actually got upset at me for letting her go! What in the world should she have expected? There’s hidden costs to hiring temps, I guess, is the lesson.

  13. Arequipa01 says:

    Is it possible that in the course of broadening global experience that US corporations are entering a period of importing employment modalities (as well as others)* that are common in the developing world?

    Many people in this country have opted to undergo the ‘tabula rasa’ process of ‘de-knowledgification’ and as such are akin to paramecia whose membrane has been rendered completely permeable. Trust me, they’re coming for your livers and kidneys, so ruin ‘em now while you still have a reasonable claim of ownership…

    *We aren’t exporting best practices anymore.

  14. Transor Z says:

    @Curmudgeon:

    Can you forward that temp’s info to me? I need somebody to spot-cover hearings and depos.

  15. Transor Z says:

    BTW, liked the post, Invictus. Challenging conventional wisdom.

  16. maxrockbin says:

    It’d be interesting to see GDP on this graph. You’d guess that the temp job growth vs regular job growth would be a leading indicator.

  17. dad29 says:

    I’ll agree with KentWillard.

    What I’m hearing out here is that demand is bumping up slightly, then bumping down again. Just not enough ‘juice’ in the demand to go permanent with employees–at least so far

  18. in the “What ‘Letter’ does it look like(?) Shape of the Economic ‘Rebound’-Sweepstakes”

    this is, yet, more proof for the (get out your Mirror) “y” ‘entry’..

    if, by “Change”, We wanted ‘neo-Feudalism’, We’re not going to be disappointed.

    or, IOW, much to Curm’s point, above, Emp.s are being rented, like Mules..

  19. stonedwino says:

    It has been up and down….I own a small wine distributor in NY and we service all of NY. So far 2010 was up about 25% vs. 2009 until May….May and June were flat with last year, which sucked. Most customers are having cash flow issues because of the up and down nature of business and reluctant to reorder at ood times even when looking at items that move well. Everyone is still playing things closer to the vest….I read the start of the Recession really well back in Q4 of 2007….business over the last two months makes me think double dip. Mind you, I spend most of my time on the road seeing customers all over NY State, so I feel I have a pretty economy ton the pulse of our retail wine and restaurant customers.

    This “recovery” is going to take time….time enough for everyone to amortize debt and business losses, if they survive. Tough out there….

  20. Casual Onlooker says:

    @curbyourrisk stated:

    “The problem is how the data is reported. If the Government issued it, its manipulated.”

    The mantra of everyone in the government are liars and cheats is a lame argument. Conspiracy theories rarely further an intelligent discussion.

    To the topic at hand…

    I think you are seeing two things with the shift in temp hiring. One is that temp hiring may be a leading indicator, but the great recession was a serious shock to the system. It doesn’t surprise me in the least to see employers holding out until they are sure, damn sure, that the economy is back up, with no risk of a double dip before they hire people permanently. This leading indicator has a very long lead time.

    Second, you may see more of a paradigm shift in how some companies are viewing employees. About a month back NPR did a piece on a marketing company that laid off all their employees, then hired them back as independent consultants. When asked if when the economy is back to full steam again would they go back to business as it used to be, they answered no. They felt that the new arrangement was better for all involved, and that the change was permanent. Being in the tech industry myself, this trend is nothing new.

  21. Rescission says:

    Many things causing this trend. And with the current regulatory environment it should continue.
    Causes:
    1. Try before you buy makes sense because its easy to get rid of a bad egg.
    2. Medical Benefits. The whole system of employer provided medical coverage is a flawed system. Individual HSA’s that go with the individual and not “company medical plans” would change this. But we missed that opportunity. As costs go up, you may see more temps.

    However, employers would still rather move someone to permanent if they are good. It’s cheaper in that the temp agencies charge an arm and a leg for temps, and make a big spread. Temp employees are actually more expensive than permanent employees in the short term.

  22. lalaland says:

    sittin on cashh………. sittin on cash………. won’t hire nobody I’m sittin on cash……..

  23. [...] is a disturbing gap between the growth of temp jobs and other private-sector [...]

  24. [...] may recall that last month we picked up on a troubling signpost in the divergence between temporary hiring and private sector [...]