You may recall that last month we picked up on a troubling signpost in the divergence between temporary hiring and private sector payrolls (less temps).  In that post, I produced the following chart (below is from last month’s post, not updated with most current data):

I wrote:

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. 

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.

Well, Temp Services declined by 5.6k this month in Friday’s NFP report, and the WSJ was all over it:

Does the Drop in Temps Signal Trouble Ahead?

Temporary-help employment is generally considered a leading indicator for the overall labor market. So July’s decline in temp payrolls is a worrisome indicator for the coming months.

Again, many metrics now have a distinct late-cycle feel to them.  Temp Services, for example, is startinig to run into some difficult comps, as are many other data points (including, eventually, corporate earnings, which are still coming off a fairly low bar).  Come on, WSJ, read TBP and you coulda had this story last month.

Category: Cycles, Data Analysis, Economy, 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 “Follow Up On Temp Services Hiring”

  1. call me ahab says:


    that Carlin clip is a classic

  2. Winston Munn says:

    Although this information is from a May, 2006, article, the trend appears unchanged. From

    “Thus for households in the bottom 60 percent of the income distribution in the United States, average personal consumption expenditures equaled or exceeded average pre-tax income in 2003; while the fifth of the population just above them used up five-sixths of their pre-tax income (most of the rest no doubt taken up by taxes) on consumption….”

    With U6 greater than 16%, the downward pressure on wages continues unabated, making a consumption-based recovery impossible.

    Unfortunately, is seems to be a political impossibility to reverse the trend of rewarding the capitalist on the backs of labor, even when to continue to do so is as fanciful a belief as faith in a perpetual-motion machine. Without sharing the spoils of increased productivity, labor only has debt to fill the void. Acquisition of debt is limited to a percentage of wages without a merry-go-round Ponzi-like avenue of false wealth accumulation such as a housing bubble.

    With no false wealth, consumption is tied to wages. If wages remain flat or fall, how does consumption vary from that trendline?

  3. Mannwich says:

    Agreed, ahab. An absolute classic. He nails it in three minutes. Everything else is just theater.

  4. Vilgrad says:

    call me ahab & Mannwich

    I think everyone needs to see that video. I’ve gotten a couple sites to post it, but I think it hits too close to home for the standard financial websites. Carlin is dearly missed.

  5. Petey Wheatstraw says:

    “With no false wealth, consumption is tied to wages. If wages remain flat or fall, how does consumption vary from that trendline?”

    Well said, WM.

    Once again, the answer is: by fraud (until the reality of our fleecing becomes undeniable — then it will be through reappropriation by The People*).

    * FSM help us when we find out exactly who constitutes “The People.”

  6. Super-Anon says:

    This reminds me of how in 2002-2004 all the full-time tech workers that lost their jobs in 2000-2001 got hired back as contractors without benefits.

  7. Trevor says:

    @Petey: Ramen.

  8. jessica says:

    Were the census workers included in the temp hiring? (Or excluded because that is government?)
    If they were included, how much would take have affected the temp numbers?

  9. cewing says:

    When making these calculations, how to they account for people who start out as temps or contractors and then are eventually hired full-time? In my little corner of the world, that seems to be the way many companies are starting to do things now.

  10. JasRas says:

    I am wondering if over the last decade, the functional use of temp jobs isn’t so temporary anymore. We’ve moved very much to a “just in time” world and it seems it is quite possible that jobs are mostly just in time also. The other question would have is if there was truly more demand for labor, wouldn’t be see avg. hours worked at a bit higher number than now? Seems like there is still plenty of slack in the system that should be removed before adding more bodies to the payroll…

    Aren’t temp workers also kind of the litmus test or precursor that an employer uses “just in case” a recovery isn’t real? That way there are no benies involved, etc. If the litmus test is failing because there is no demand following inventory rebuild, then logic would follow that temp numbers would drop with no follow through on real jobs… It really could be an ominous sign.

  11. wunsacon says:

    Munn +1000

    Here’s one of the (many) people who saw this coming 16 years ago:

    As you can see, to even make these arguments is met with disbelief and polite scoffing. And it *continues to be so* among the “free trade, low taxes” crowd, the educated/indoctrinated “useful idiots” who provide intellectual cover for the plutarchy.

  12. Mannwich says:

    Isn’t this what happened in Japan following their real estate bust? I’ll have look this up but didn’t about 30 pct of their workforce basically become permanent temps? Perhaps we are following down that path as well?

  13. Evoo Kermartin says:

    Wunsacon, thank you. Missed that interview. Chilling. And what a moronic talking point from Laura Tyson that manufacturing moved to Asia not to save on labor costs but to move to the Asian market! As if those goods weren’t loaded on cargo ships to sell computers and DVD players to U.S. and European consumers!

  14. Lariat1 says:

    Carlin nails it.Years age my husband was attending a meeting with one of our very, very wealthy wall St. clients, they were waiting for the electrician to show up and this sporty little Mercedes starts up the ridiculously long drive, upon spotting the car, the wife turns to her husband and states that if the electrician is driving that, then they are paying him WAY TOO MUCH. Of course it wasn’t the electrician, because us ” poor low class people ” know better than to show off the rewards of our hard work in front of them. Shit, we drive the beater work trucks around them. Then we buy a lot of land elsewhere and drive our cool vehicles up north and we try to travel and see this the beauty of this country. The middle class had a run for a while after WWII but it’s all falling away now. Gonna teach my boy how to be a HOBO.

  15. purple says:

    U.S. productive output is no longer strong enough to support global reserve currency status or empire. If Wall Street continues to demand and receive reserve currency status then there is little that can be done about domestic employment short of blowing up an even more destructive bubble. We will continue to run massive trade deficits , investment will leak out of the country even if originating from the government, the country will become more hollowed out, more stratified, and less democratic.

    If the US elite cannot give up their love for empire the US worker is ever more screwed within the existing system.

  16. call me ahab says:


    thanks for that link my friend-

    incredible clairvoyance there- everything has played out exactly as Sir Goldsmith described-

    especially the thought that the regular folk here would be subsidizing the rich over there- exactly!

    and then we have Carlin at the top of the post- letting everyone know why it turned out like it did

  17. Mannwich says:

    Amazing video, wunsacon. Just incredibly prescient of Sir Goldsmith. And Laura Tyson, for being so wrong, gets rewarded with a job as an advisor to the Obama campaign in ’08.

  18. Winston Munn says:


    Fascinating Charlie Rose interview. Goldsmith argued facts from a rational perspective; Tyson argued dogma like a religious disciple.

  19. Mannwich says:

    That’s the issue, isn’t it Winston. Economists (and their political handmaidens) have literally sold us down a river with their quasi-religious dogma and subsequent blind faith in that dogma. We’re all just one big laboratory for their half-baked ideologies to be tried and tested.

  20. dss says:


    Not just a classic, he was one of the few that told it like it really is.

  21. dss says:


    I think that you give them too much credit, this is no experiment, they knew what the policies they were espousing would do to our economy. Tyson was/is just another hack trying to provide cover for more of those policies.

  22. Ilya says:

    Thanks for the link to Sir James Goldsmith’s interview with Charlie Rose. He correctly pointed out that without free immigration, capital was forced to migrate to its highest and best use/return. So? Where is the suprise?

    Sir James was a very altruistic, in his later years, capital markets pirate who spoke his mind as a true Western Socialist. I do not use the term ‘Western Socialist’ in a negative sense. Any society that funds at any cost anti-nicotine Nazis should be considered arch socialist. It is just who we have become.

    My problem with Sir James is that he tilted at windmills. Do not misunderstand, everything he said was true and valid. For global business interests and their toady governments, trade continues apace.

    I think it was best said by Jefferson. “Merchants have no country. The mere spot they stand on does not constitute so strong an attachment as that from which they draw their gains.” Thus it has ever been!

  23. Just curious: how good of a leading indicator is temp hiring if we are possibly entering a different era where temps are the new full-time worker?

    At least in the law market, many law firms are now preferring temps over high paid grunt work starter associates. Some are temp to hire, but from talking to some top partners at top firms, seems like so long as there are a large group of fresh law school grads willing to work via short term contract (in exchange for perceived flexibility during a time when they don’t really know what they want to do longer term), law firms will continue to exploit this group more so for all the obvious benefits during a recession.

    When I really think about it, as the information age matures, this group may become so substantial that “perma temps” may become more of a norm even during expansionary cycles.

  24. FrancoisT says:

    “And what a moronic talking point from Laura Tyson that manufacturing moved to Asia not to save on labor costs but to move to the Asian market!”

    Her points were so against the facts that she constantly interrupted Sir Goldsmith, which, was a successful international business man and had his ear on the ground, as opposed to Tyson’s head lost in the clouds of the Ivory tower.