Industry Consulting Firm G. Palmer & Associates’ Quarterly Forecast Assists in Previewing Near-Term Hiring Patterns
NEWPORT BEACH, CA, Oct. 12, 2022 (GLOBE NEWSWIRE) -- via NewMediaWire – Demand for temporary workers in the United States is expected to increase 6.2% on a seasonally adjusted basis for the 2022 fourth quarter, when compared with the same period in 2021, according to the Palmer Forecast™, released today. The increase in demand principally reflects continued strong demand for labor across most sectors.
The Palmer Forecast™ indicated a 9.6% increase in temporary help for the 2022 third quarter. Actual results as reported by the Bureau of Labor Statistics (BLS) came in slightly higher, with an increase of 10.8%, reflecting greater demand than originally anticipated.
Demand in jobs across all categories remained strong, with a total of 10.1 million open jobs reported by the BLS, as of October 4, 2022, for data through the month of August.
The BLS reported that temp help jobs increased by 27,200 in September 2022, a gain of 11.3% year-over-year, to 3.1 million jobs. Year-to-date through September 2022, there have been 118,800 jobs added, 13,200 average per month. Temp help jobs in 2021 rebounded substantially from the prior two years, with a total of 302,800 added for the year and an average of 25,200 jobs added per month. According to the BLS, 201,000 and 27,000 temp jobs were lost in 2020 and 2019, respectively. In 2018, more than 99,000 temp help jobs were added over 2017.
The Labor Department reported that nonfarm payroll employment increased by 263,000 jobs in September 2022, which was slightly ahead of consensus estimate increases of 250,000 jobs. For the 2022 third quarter, there were 1.1 million nonfarm jobs added, averaging 375,000 per month, up 3.9% on a year-over-year basis. For 2021, nonfarm employment was up by 6.4 million jobs, compared with 2020. To put this in perspective, there were 9.4 million jobs lost in 2020, and 2.1 million total jobs added for 2019. For 2018, a total of 2.6 million new jobs were created, versus 2.1 million new jobs in 2017.
The key categories of jobs created are as follows:
• Total Non-Farm: +372,000
• Private Sector: +288,000
• Private Service Production: +244,000
• Leisure and Hospitality: +83,000
• Education and Health Services: +60,000
• Professional and Business Services: +46,000
• Temp Help: +27,200
• Manufacturing: +22,000
• Construction: +19,000
• Government Sector: -25,000
In September 2022, the labor participation rate decreased 10 bps from August to 62.3%, and it has been in a narrow range of 64.4% to 61.9% since June of 2020. The U3, commonly referred to as the unemployment rate, decreased 20 bps to 3.5% in September versus August.
As reported by the BLS, the rate of unemployment for workers with college degrees decreased 10 bps in September 2022 versus August 2022, to 1.8%, and the unemployment rate for workers with less than a high school education decreased 60 bps to 5.6%. 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 30 bps to 6.7% in September versus 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.
“The temp help employment market improved again in September, and the trend will likely continue, throughout 2022,” 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. “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, the temp penetration rate improved slightly to 2.09% of the total labor market, and surpassed the previous all-time high of 2.08% achieved in February, and a pre-pandemic level of 1.57%. The penetration rate cycle last peaked at 2.05% in December 2015 and was at a low of 1.3% in June 2009.
“The largest continuing issue remains the number of workers entering the workforce and seeking new opportunities, with elevated demand for employees throughout most of the U.S. Staffing companies are reporting extreme difficulty filling the many current open jobs they have. The American Staffing Association (ASA) Staffing Index also improved from an index low of 59.9 on May 10, 2020, to a close of 106 on September 18, 2022, setting a new record high, which was 7.6 higher than the same period last year,” Palmer added.
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.
Philip Boronow, Analyst
G. Palmer & Associates
949.201.7296
www.GPalmerandAssociates.com
