Labor Forecast Predicts 9.6% Increase in Demand for Temporary Workers for 2022 Third Quarter, Signaling a Continued Tight Labor Market Ahead

Industry Consulting Firm G. Palmer & Associates’ Quarterly Forecast Assists in Previewing Near-Term Hiring Patterns

NEWPORT BEACH, CA, July 15, 2022 (GLOBE NEWSWIRE) -- via NewMediaWire – Demand for temporary workers in the United States is expected to increase 9.6% on a seasonally adjusted basis for the 2022 third quarter, when compared with the same period in 2021, according to the Palmer Forecast™, released today. The increase in demand principally reflects strong demand for labor across the U.S.

The Palmer Forecast™ indicated a 7.4% increase in temporary help for the 2022 second quarter. Actual results as reported by the Bureau of Labor Statistics (BLS) came in higher, with an increase of 11.9%, reflecting an almost 2% decline in labor productivity as demand in labor was greater than anticipated.

Demand in jobs across all categories remained strong, with a total of 11.3 million open jobs reported by the BLS, as of July 6, 2022, for data through the month of May.

The BLS reported that temp help jobs increased by 5,400 in June 2022, a gain of 11.0% year-over-year, to 3.1 million jobs. Year-to-date through June 2022, there have been 70,101 jobs added, 11,700 average per month. There was a solid rebound in temp help jobs in 2021, with a total of 302,800 added for the year and an average of 25,200 jobs added per month. According to the BLS, 201,000 temp jobs were lost in 2020, or an average job loss of 16,700 per month. The BLS also reported 27,000 temp help jobs were lost in 2019, an average of 2,200 fewer jobs per month. In 2018, more than 99,000 temp help jobs were added over 2017.

The Labor Department reported that nonfarm payroll employment increased by 372,000 jobs in June 2022, which was ahead of consensus estimate increases of 275,000 jobs. For the 2022 second quarter, there were 1.1 million nonfarm jobs added, averaging 375,000 per month, up 4.3% on a year-over-year basis. For 2021, nonfarm employment was up by 6.4 million jobs, compared with 2020. To put this in perspective, there were 9.4 million jobs lost in 2020, and 2.1 million total jobs added for 2019. For 2018, a total of 2.6 million new jobs were created, versus 2.1 million new jobs in 2017.

The key categories of jobs created are as follows:

  • Private Sector: +381,000
  • Total Non-Farm: +372,000
  • Private Service Production: +333,000
  • Education and Health Services: +96,000
  • Leisure and Hospitality: +67,000
  • Professional and Business Services: +40,000
  • Manufacturing: +29,000
  • Construction: +13,000
  • Temp Help: +5,400
  • Government Sector: -9,000

In June 2022, the labor participation rate was unchanged at 62.2%, and it has been in a narrow range of 64.4% to 61.9% since June of 2020. The U3, commonly referred to as the unemployment rate, remained unchanged at 3.6%.

As reported by the BLS, the rate of unemployment for workers with college degrees decreased 10 bps in June 2022 versus May, to 2.1%, and the unemployment rate for workers with less than a high school education increased 60 bps to 5.8%. The U6 unemployment rate, which tracks those who are unemployed, as well as those who are underemployed and are working part-time for economic reasons, was down 40 bps to 6.7% in June versus May. The U6 rate is considered the rate that most broadly depicts those most affected by the last economic downturn and measures the rate of discouraged workers.

“The temp help employment market improved again in June, and the trend will likely continue, throughout 2022,” said Greg Palmer, founder and managing director of G. Palmer & Associates, an Orange County, California-based human capital advisory firm that specializes in workforce solutions. “One of the most revealing indicators to watch is the temp help penetration rate, because it measures temp help as a percentage of total employment. In June, the temp penetration rate remained strong, at 2.07% of the total labor market, compared with the all-time high of 2.08% in February, and a pre-pandemic level of 1.57%. The penetration rate cycle last peaked at 2.05% in December 2015 and was at a low of 1.3% in June 2009.”

“The largest issue remains the number of workers re-entering the workforce, since there is greater selectivity in seeking new opportunities, with the current high demand for employees. Staffing companies are reporting extreme difficulty filling the many current open jobs they have. The American Staffing Association (ASA) Staffing Index also remained steady and improved from an index low of 59.9 on May 10, 2020, to a close of 106 on June 12, 2022, remaining flat with 2021, and exceeding the pre-pandemic levels of 2019 by 10.4%,” Palmer added.

About the Palmer Forecast™

The Palmer Forecast™ is based, in part, on BLS and other key indicators. The model was initially developed by the A. Gary Anderson Center for Economic Research at Chapman University and serves as an indicator of economic activity. Companies that employ temporary staff use the forecast as a guide to navigate through fluctuating economic conditions in managing their workforce to meet business demands.

About G. Palmer & Associates

G. Palmer & Associates, founded in 2006, provides advisory services in the human capital sector. Founder Greg Palmer has served on the board of the American Staffing Association and was president and chief executive officer of RemedyTemp, Inc., one of the nation’s largest temporary staffing companies, prior to its sale in June 2006. For more information, visit

Philip Boronow, Analyst
G. Palmer & Associates

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