Temporary Jobs Rising

Although better than nothing, temporary jobs are not what people looking for a career want.   It is long-term jobs that provide longevity, higher pay, and benefits like 401K and health care insurance. The current high unemployment rate of 9.1 percent is not factoring in the true economic pains of  temporary workers as they are officially counted among the employed.

However, temporary workers do provide flexibility for companies to hire some rather than none in an environment that is uncertain for the outlook of future business. In fact, the changes in temporary employment have been a very good early indicator about the direction of more permanent staffing. Layoffs of temporary workers nearly always precede  broader employment cuts. Hirings in temporary jobs mean increased broader employment gains down the road.

The chart below shows the percentage change in jobs in the Temporary Help Services sector. Note the bigger swings in temp jobs versus total private sector jobs. If one examines the data points more closely, one would find that a turnaround in temp jobs occur before the turnaround in  total jobs. The latest indication is that  job hiring in the temp sector lost some steam but is still growing at near 10 percent compared to one year ago.

Viewed another way, there are 2.3 million workers in the Temporary Help sector, up about 500,000 from the low levels seen two years ago. However,  recent past peaks in temp jobs have been around the 2.6 million mark. That means another 300,000 jobs in the temp sector may be required before companies start hiring people on a more permanent basis. With each passing month,  temp job hiring has improved.  Let’s hope that we can be back to a quicker hiring pace for the broader economy by early 2012.

Lawrence Yun, PhD., Chief Economist and Senior Vice President

Lawrence Yun is Chief Economist and Senior Vice President of Research at NAR. He directs research activity for the association and regularly provides commentary on real estate market trends for its 1 million REALTOR® members.

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