-- Industry Consulting Firm G. Palmer & Associates’ Quarterly Forecast
Assists in Previewing Near-Term Hiring Patterns –
NEWPORT BEACH, CA, April 19, 2023 (GLOBE NEWSWIRE) -- via NewMediaWire – Demand for temporary workers in the United States is expected to decrease 2.0% on a seasonally adjusted basis for the 2023 second quarter, when compared with the same period in 2022, according to the Palmer Forecast™, released today. The rate of increase in demand has been softening since the fourth quarter of 2022.
The Palmer Forecast™ indicated a 1.5% increase in temporary help for the 2023 first quarter. Actual results as reported by the Bureau of Labor Statistics (BLS) decreased by 2.7%, reflecting actual GDP growth, which came in at less than 1% below what was previously expected.
A total of 9.9 million open jobs were reported by the BLS, as of April 4, 2023, for data through the month of February 2023. However, non-farm payroll growth has seen a steady softening throughout the second half of 2022, and this trend is continuing into 2023.
The BLS reported that temp help jobs decreased by 10,700 in March 2023, a loss of 4.1% year-over-year. To date 9,300 jobs have been added in 2023, an average of 3,100 jobs added per month. There was a decline of 30,000 temp jobs in 2022, or an average of 2,500 temp jobs lost per month. Temp help jobs growth in 2021 was strong, with a total gain of 302,000 jobs, and an average of 25,200 jobs added per month, compared with the prior two years, when 201,000 temp jobs were lost in 2020, and 27,000 temp jobs were lost in 2019, according to the BLS. In 2018, more than 99,000 temp help jobs were added over 2017.
The Labor Department reported that non-farm payroll employment increased by 236,000 jobs in March 2023, which was in line with consensus estimate increases of 240,000 jobs. For the 2023 first quarter, there were 345,000 non-farm jobs added per month, up 2.4% year-over-year. Growth for the 2023 first quarter indicates a slight softening in the labor market. For the 2022 full year, there were 4.5 million jobs added, an average of 375,000 jobs per month. In 2021, non-farm 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: +236,000
• Private service – providing: +196,000
• Private Sector: +189,000
• Leisure and Hospitality: +72,000
• Healthcare: +50,000
• Government: +47,000
• Professional and Business Services: +39,000
• Retail Trade: - 15,000
• Temp Help: -10,700
• Goods Producing: -7,000
In March 2023, the labor participation rate increased 10 bps from February 2023 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 10 bps to 3.5% in March versus February.
As reported by the BLS, the rate of unemployment for workers with college degrees in March 2023 was the same as February, at 2.0%. The unemployment rate for workers with less than a high school education decreased 100 bps to 4.8%. 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 10 bps to 6.7% in March versus February. 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 is showing further signs of slowing down. Until GDP growth resumes to a stronger level and interest rates stabilize, growth will be nonexistent, and temp help will continue to soften,” 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. “A further indicator to watch is the temp help penetration rate, because it measures temp help as a percentage of total employment. In March 2023, the temp help penetration rate decreased slightly to 1.96% of the total labor market, compared with an all-time high of 2.08%, achieved in February 2022, and a pre-pandemic level of 1.57%, a further sign of temporary jobs lessening.
“The penetration rate cycle last peaked at 2.05% in December 2015 and was at a low of 1.3% in June 2009. The American Staffing Association (ASA) Staffing Index remained flat, closing at a value of 98 on March 19, 2023, which was 6.6% lower 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.
Contact:
Roger S. Pondel/Judy Lin Sfetcu
PondelWilkinson Inc.
310.279.5980
Philip Boronow, Analyst
G. Palmer & Associates
949.201.7296
www.GPalmerandAssociates.com
