U.S. Payrolls To Expand Three Months After Temp Turnaround

Temporary employment is often considered a leading indicator for the overall labor market. When temp employment turns around, the rest of the job market is supposed to flip as well.

How long should that take? Three months, the temp industry’s trade group, the American Staffing Association, said today. The group conducted an analysis of 36 years of government data with a consulting firm, the Inavero Institute for Service Research, to bolster the view that staffing industry employment is a strong coincident economic indicator when the economy is emerging from a recession. It’s a leading indicator (by three months) for non-farm payroll employment when the economy is coming out of a downturn, the group says.

Where does that leave us? Temp employment declined by 7,000 in May, while a broader category for business and professional services fell by 51,000 jobs for the month. So if the research holds up, the U.S. labor market won’t be adding jobs until September at the earliest (if the temp figure were to inch into positive territory this month). Given the latest payroll report — a loss of 345,000 jobs in May — September might not look so bad.

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