-- Industry Consulting Firm G. Palmer & Associates’ Quarterly Forecast Assists in Previewing Near-Term Hiring Patterns --
NEWPORT BEACH, Calif., Oct. 08, 2020 (GLOBE NEWSWIRE) -- Demand for temporary workers in the United States is expected to decrease 15.1% on a seasonally adjusted basis for the 2020 fourth quarter, when compared with the same period in 2019, according to the Palmer Forecast™, released today.
The Palmer Forecast™ indicated a 15.6% decrease in temporary help for the 2020 second quarter. Actual results as reported by the Bureau of Labor Statistics (BLS) came in at a decline of 19.8%. There were only 8,100 temp jobs added in September, and this represented a 16.1% year-over-year decline. September surprisingly lost momentum in temp help job gains, as the prior three months added more than 100,000 jobs each month.
According to the BLS, while 8,100 temp help jobs were added in September, year-to-date, an historic 475,000 temp jobs have been lost thus far in 2020. The BLS also reported that 42,000 temp help jobs were lost in 2019, an average of 3,500 fewer jobs per month. In 2018, more than 99,000 temp help jobs were added vs. 2017, an average of 8,200 per month. Additionally, 96,000 temp jobs were added in 2017 over 2016, an average of 8,000 per month, versus 32,000 temp jobs added in 2016, or 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 in 2012.
The Labor Department reported that total nonfarm payroll employment increased by 661,000 in September 2020, vs. a consensus of 858,000, following an increase of 1.5 million in August. These gains reflect a partial resumption of economic activity that had been curtailed due to the coronavirus pandemic. To put this in perspective, there were 176,000 jobs added on average per month in 2019 and 2.1 million total for the year, which was less than the 220,000 added per month in 2018, and 2.6 million total for that year. For 2017, a total of 2.1 million new jobs were created, versus 2.2 million new jobs in 2016.
The key categories of jobs created are as follows:
- Non-farm jobs: +661,000
- Hospitality and leisure: +318,000
- Retail: +142,000
- Education and Health Services: +108,000
- Professional and business services: +89,000
- Manufacturing: +66,000
- Construction: +26,000
- Temp help Services: +8,100
- Government sector: -216,000
In September 2020, the labor participation rate decreased by 30 bps from August to 61.4%, but was 200 bps below February. The U3, commonly referred to as the unemployment rate, declined by 50 bps to 7.9% in September vs. August.
As reported by the BLS, the rate of unemployment for workers with college degrees ticked down 50 bps in September vs. August, to 4.8%, and the unemployment rate for workers with less than a high school education decreased 200 bps to 10.6%. 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 140 bps to 12.8% in September vs. August. 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 September 2020, the temp penetration rate unchanged at 1.74% of the total labor market, versus a low of 1.3% in June 2009, and this cycles peak at 2.05% in December 2019,” 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.
The next few quarters
“The temp help employment market recovery has slowed in September, as compared with the gains realized during the rebound this summer,” Palmer added. “There are several factors at play creating the slow down, particularly due to the uncertainty of a second round of stimulus dollars for unemployment benefits, as well as additional bail out for businesses impacted by Covid-19. It will be important to review the American Staffing Association Staffing Index for clues in the coming weeks regarding the temp help portion of the recovery.”
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.
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