Temp Jobs Still Rising, Though Not as Fast

For the seventh month in a row, temporary help services jobs posted strong gains in April. Since last September, the sector has added over 330,000 positions.þþEconomists are watching this sector closely for clues to what employers writ large will do, since employers often use temp services when they need more workers but are unwilling to commit to investing in a new, permanent staff member.þþIt works the other way around, too: When business is doing badly, temp workers are the first to go, since employers don’t want to dismiss staff members in whom they’ve invested time and training, just in case things get better soon.þþTake a look at the payroll trends in the chart below. It shows the change in all nonfarm payroll jobs (red line) and the change in temporary services jobs (orange line) relative to their levels when the recession began in December 2007.þþAs you can see, when the economy first took a turn for the worse, employment in temp services fell a lot faster than that in the rest of the nonfarm sector (that is, the orange line dropped more steeply than the red line did). But temp payrolls also rose earlier than the rest of the job market did, with temp employment picking up as early as last fall.þþThe increase in temp hiring has slowed a little bit in recent month; notice that the orange line is not quite as steep as it was at the end of last year. That may be partly because some people initially hired for temp work are being made permanent employees, contributing to the growing pace of overall nonfarm payroll growth.þ