One of the things economists watch to try to gauge the job market is how the temporary worker market is doing. Many times a rise in temp workers signals businesses are gearing up for more permanent hiring as the economy gains steam. The opposite is many times also true. And, unfortunately, it appears that this particular indicator isn’t giving us the warm fuzzy feeling we hoped it would:
Last month’s fall in the number of temporary workers could herald continued weakness in the job market.
The total number of temporary employees placed by staffing agencies dipped by 12,000 last month and is down 19,000 the past three months, the Bureau of Labor Statistics reported Friday.
Now perhaps 3 months can’t be considered a “trend”, but it is pretty darn close. And it parallels the news we’ve been getting about unemployment and the economy in general.
Temporary workers, however, could be the most telling signal. The number of contingent workers started growing in fall 2009, about six months before the broader job market began to emerge from the recession. From September 2009 to March, employers added nearly 500,000 temporary workers.
Roy Krause, CEO of SFN Group, a top staffing agency, says temporary placements for white-collar jobs in accounting, computers and legal remain strong. But those for lower-skilled light industrial, clerical and certain call-center jobs — which accounted for most of last year’s growth — have slowed. "They tend to be more sensitive to economic conditions," he says.
Chemical maker Arkema of Philadelphia employed about 150 temporary workers earlier this year. But it trimmed that total by about 50 in April and May as the weak economy prompted it to cut its 2011 forecast, Vice President Chris Giangrasso says. Arkema, he says, will likely not add this year to its permanent staff of about 2,500 in North America.
Key point – “weak economy”. He had enough growth last year to warrant hiring temp workers but not full time staff. Now he doesn’t even have enough business to warrant 2/3rds of the temps he hired and had to let them go.
That weakness in the economy continues to linger because, as we’ve noted any number of times, of the unsettled business climate. And that’s something government could do to help the situation – back off regulation, taxes and interference (*cough* NLRB/Boeing*cough*) and stay out of the way. It seems, though, that doing so is just not in this administration’s genes.
And so the negative indicators continue to pile up while the President of the United States and a complicit media attempt to make bad guys out of the GOP as they hold the line against economy crippling tax increases.