Source: Bruce Steinberg


Standard economist orthodoxy is that Non Farm Payroll is a “lagging indicator. What that means precisely is that the change in payroll in terms of both direction and magnitude will lag the overall business cycle. Meaning, the employment will turn up after he business cycle has already circled up, with the same pattern to the downside.

There is a caveat to this, in that hours worked, wages and temp help typically lead employment, and often is coincident or even leading to the business cycle.

Which brings us to the chart above, via Bruce Steinberg, who is the man when it comes to all things temp help. It shows Temporary Help Services surpassing prior highs set 13 years ago in April 2000.

Why is this significant? Very often, when companies engage in temp services for hiring, it can be a prelude to further permanent hiring. Some firms need immediate bodies faster than they can find ‘em themselves; others are worried about future demand and are being (excessively) cautious. In each case, we often see the temp hiring lead more permanent hiring.

Here is Bruce:

Two sectors that were fairly important customers to many temporary help services back in 2000 were manufacturing and construction. In April 2000, those two sectors represented a total of 21.1 percent of all nonfarm employment. By 2006, they were only about 16 percent and last month those two sectors were only 13.1 percent of all nonfarm employment. And speaking of manufacturing — it could again become a major force for the staffing sector — there is speculation that the “energy revolution” could again make the United States a manufacturing powerhouse. For example, the cost of energy is about six times more expensive in Europe than in the U.S. so German carmaker BMW built a new factory in accordance to state-of-the-art sustainability principles in the U.S. to produce carbon fibers, which is a very energy intensive process. [We explored the apparent return of U.S. manufacturing in this space back in February.]

Temporary help services sector has been able to exceed its previous high 13 years ago despite significant shrinkage in two major customers sectors by servicing more sectors and / or broadening their array of services. But, they were not able to grow in terms of their share of the job market since the market share of temporary help services is slightly lower now (1.98 percent) than back in 2000 (2.03 percent).”

If you have any interest in the arcana of NFP, I suggest you sign up for Bruce’s free email — those of you who have a research budget can also buy The Liscio Report put out by Philippa Dunne. It is also outstanding.



U.S. Employment Situation (May 2013)
Bruce Steinberg | June 7, 2013

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.

8 Responses to “Temporary Help Services Reach Record High”

  1. b.remson says:

    Any thoughts on how the ACA has affected hiring?

  2. Pantmaker says:

    Good points here. You want to see something depressing….hold hours worked as a constant and look at the overall employment picture.

  3. > For example, the cost of energy is about six times more expensive in Europe than in the U.S.

    This is a dramatic difference in costs . . . any source for this?

  4. TerryM says:


    Is there any insight into the mix of sectors that are utilizing temp hiring today (and also the mix in 2000)? I wonder if one can get insight into the relative health of certain sectors by their temp workforce utilization levels.

  5. Angryman1 says:

    your forgetting illegals. it is a big reason why centrists wanted illegals counted for years as “guest workers”. They are low skill jobs that are never counted in the survey’s.

    Frankly, I think the government is really lagging behind right now. Really lagging. They are probably going to have a huge drop in unemployment in the late summer early fall after benchmark revisions like last year.

    The Temp/illegal job creation machine has screwed things up. A lot more jobs are being created fulltime………..but they are bean counting like they are in the mid-20th century.

  6. SecondLook says:


    They are being a bit misleading about that cost differential. It seem that the factory in the US is going to draw on 3 cents per kWh from a hydroelectric plant which is less than half the average industrial cost of electricity in the US.
    Roughly, German electrical industrial-use cost (including taxes and other fees) is about 13 cents. US cost (with great variation) is 6.5 cents approximately.

    Another salient, but omitted fact: Electricity, and energy in general, has always been cheaper in the States than Europe.

    You know, these are really easy facts and data points to get hold of…. (sighing)

  7. chartist says:

    My company uses a temp agency to scour the area for able bodied workers who we then bring in for a trial run….If they can hack it and show up on time, we hire them full time after 90 days probation.

  8. bear_in_mind says:


    I don’t disagree with your insight about temp workers providing a unique, secondary market signal. However, I successfully worked in that industry for many years and got out in the mid-90′s when it became abundantly evident that the more effective our industry became, the more aggressively business would undermine the hard-fought 20th-century American middle class social contract, to wit, full-time, 40 hour-per-week employment with health and vacation perquisites.

    It became unconscionable seeing smart, hard-working people in the prime of their lives cast-off for nebbish kids who’d spend 14-hour days coding the latest programming language for the same salary, plus pizza and soda. And today, these type of distortions have become truly grotesque. The work landscape for folks possessing less-than 18 years’ education has become a cross between The Fountainhead and Lord of the Flies.

    The haute bourgeoisie are slobbered-over for the “deservedness” of their largesse, while citizens who’ve lived frugal and busted their asses for decades to build the infrastructure from which we all reap the fruits, are cast as unworthy to collect modest SSA and pension benefits promised them. Shameful sh*t.

    Anyway, will be interesting to see the trajectory of these trends moving forward.