NEWPORT BEACH, Calif., April 13, 2010 (GLOBE NEWSWIRE) -- Demand for temporary workers in the United States is expected to increase 10.8% on a seasonally adjusted basis for the 2010 second quarter over the same period in 2009, according to the Palmer Forecast™, released today.
The Palmer Forecast™ indicated a 3.8% decline in temporary help for the just-ended 2010 first quarter, which actually came in at a 3.6% increase—significantly better than anticipated, primarily due to stronger than expected GDP growth and decreased unemployment.
A graph accompanying this release is available at http://media.globenewswire.com/cache/10062/file/8086.jpg
"Following recent trends, our 2010 second quarter forecast shows continued steady improvement and should produce a sharp increase in demand for temporary workers, marking the second consecutive quarter of year-over-year increases," said Greg Palmer, founder and chief executive officer of G. Palmer & Associates, an Orange County, Calif.-based staffing industry consulting firm. "It is clear that the labor markets are showing sustainable signs of improvement in quite a meaningful way when compared with temp labor declines as high as 27.2 % in the second quarter of 2009. Nevertheless, it is important to be cognizant that consumer spending is still sluggish, the real estate and construction sector is still depressed in many markets, and many state and local governments soon may be forced to make additional job cuts."
The Bureau of Labor Statistics (BLS) reported that seasonally adjusted temp jobs grew 8.9% year-over-year in March. Temp jobs, seasonally adjusted, were up 2.0% sequentially from February. Palmer said this trend is an especially encouraging sign of rebound in the labor markets, since March was the sixth consecutive month of positive sequential gains, which represented the creation of 126,000 temp jobs added to the economy in the quarter.
The unemployment rate remained flat at 9.7% in March. The Labor Department report also indicated that 162,000 non-farm jobs were created in March, of which 48,000 were temp Census jobs, not counted in the Temp help numbers for the same period.
"The positive direction of sequential increases in temporary help, coupled with March's positive non-farm numbers are considered to be positive signs of an improving labor market," Palmer said. "Temporary help, which historically is the first job category to improve at the beginning of an expansion, is beginning to see marked improvement, and non-farm jobs are seeing early signs of life. We are also expecting certain categories, such as Industrial Staffing, to show strong year-over-year gains in the 2010 second quarter, while Professional Staffing and Direct Hire, which historically lags, will remain somewhat softer in the quarter."
Palmer said the high unemployment rates during this recession have had wide-reaching effects across a broad spectrum of workers. As reported by the BLS, workers with college degrees experienced a slight decrease in their unemployment rate in March to 4.9 % vs. 5.0% in February. The unemployment rate for workers with less than high school degrees during the same period decreased slightly to 14.5% in March from 15.6% in February. 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 up slightly at 16.9%. The U6 rate is considered the rate that most broadly depicts those most affected by the downturn and measures the rate of discouraged workers.
The next few quarters…
"We still expect the unemployment rate to remain high for the foreseeable future," Palmer said. "At the same time, we believe that temp help job losses reached the bottom in the third quarter of 2009, as evidenced by the gains in the 2009 fourth and 2010 first quarters. We expect the trend will continue to improve from this point forward. As in our forecast for the 2010 second quarter, we expect that temp jobs will remain positive from a year-over-year perspective throughout the remainder of 2010. These views are predicated on generally anticipated continued GDP improvement," Palmer added.
A graph accompanying this release is available at http://media.globenewswire.com/cache/10062/file/8087.pdf
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, advises companies in the human capital sector with sales, operations and margin enhancement, and to explore strategic alternatives for increasing shareholder value. 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 .