Labor Forecast Predicts 0.6% Increase in Demand for Temporary Workers for 2019 Third Quarter

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


NEWPORT BEACH, Calif., July 09, 2019 (GLOBE NEWSWIRE) -- Demand for temporary workers in the United States is expected to increase 0.6% on a seasonally adjusted basis for the 2019 third quarter, when compared with the same period in 2018, according to the Palmer Forecast™, released today.

The Palmer Forecast™ indicated a 1.6% increase in temporary help for the 2019 second quarter. Actual results from the Bureau of Labor Statistics (BLS) came in at 1.2%.  There were 4,300 temp jobs added in June, and the American Staffing Association member survey data has also pointed to a declining growth trend since December 2018, with the downward trend accelerating in 2019.

“Although the 2019 second quarter marked the 38th consecutive quarter of year-over-year increases in demand for temporary workers; our forecast for the 2019 third quarter predicts a much slower rate of growth,” 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. “With the economic signals being mixed, the directional trend is slightly down as we move into the third quarter.”

According to the BLS, 8,300 temp help jobs were added for the 2019 second quarter, an average of 2,800 per month. Additionally, temp jobs for the first quarter of 2019 were revised downward, resulting a decline of 20,000 jobs for the first half of 2019, an average of 3,333 fewer jobs per month. In 2018, more than 99,000 temp help jobs were added, an average of 8,200 per month. Additionally, 96,000 temp jobs were added in 2017, an average of 8,000 per month, versus 32,000 temp jobs added in 2016, an average of 2,600 per month. In 2015, approximately 97,000 temporary jobs were added, compared with 162,000 new temp jobs in 2014, 139,000 in 2013, and 142,000 additional temp jobs in 2012.
      
The Labor Department reported an additional 224,000 seasonally adjusted non-farm jobs in June, which was above consensus expectations of 162,000.  There were 220,000 new jobs added per month in 2018, and 2.6 million total for the year.  For 2017, a total of 2.1 million new jobs were created, versus 2.2 million new jobs in 2016.  

The key job categories of  jobs growth are as follows:

  • Non-farm jobs: +224,000
  • Private sector: +191,000
  • Government sector: +33,000
  • Education and Health Services: +61,000
  • Service providing employment: +154,000
  • Professional and business services: +51,000
  • Healthcare and social assistance: +50,000
  • Temp help Services: +4,300
  • Goods Producing: +37,000
  • Construction: +21,000
  • Manufacturing: +7,000
  • Mining and logging: -1,000

In June 2019, the participation rate ticked up 10 bps from May to 62.9%. The U3 unemployment rate, generally reported as the official unemployment rate, increased 10 bps to 3.7%. As reported by the BLS, the rate of unemployment for workers with college degrees remained unchanged in June from May, at 2.1%, and the unemployment rate for workers with less than a high school education ticked up 10 bps to 5.4%. 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 up 10bps from May, at 7.2% in June. 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.

“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 2019, the penetration rate remained unchanged at 2.0% of the total labor market, versus a low of 1.3% in June 2009,” Palmer said.

The next few quarters…

Momentum in the temp help employment market continues to be moderately positive, but declining. The decline is primarily due to relatively anemic GDP growth, as well as by domestic and worldwide uncertainty. The worries regarding trade relations with China and others, as well as political uncertainty in the U.S., Europe, and other parts of the world, are causing the economy to sputter. With the consensus GDP forecast for 2019 expected to be slightly above 2.0%, moderate growth is still anticipated to continue at least through the balance of 2019.

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 www.GPalmerandAssociates.com.

Contact:   Roger S. Pondel/Judy Lin Sfetcu     Philip Boronow, Analyst
   PondelWilkinson Inc.   G. Palmer & Associates
   310.279.5980    949.201.7296
     www.GPalmerandAssociates.com