-- Industry Consulting Firm G. Palmer & Associates’ Quarterly Forecast
Assists in Previewing Near-Term Hiring Patterns –
Demand for temporary workers in the United States is expected to decrease 6.6% on a seasonally adjusted basis for the 2024 second quarter, when compared with the same period in 2023, according to the Palmer Forecast™, released today.
The Palmer Forecast™ indicated a 9.5 % decrease in temporary help for the 2024 first quarter. Actual results as reported by the Bureau of Labor Statistics (BLS) came in better than expected at a decrease of 6.6% due to better than expected GDP results.
The BLS reported a decrease of 6.6% in temporary help for the 2024 first quarter. The temp help jobs decreased by 1,200 in March 2024, a loss of 6.2% year-over-year. To date 6,000 jobs have been lost in 2024, an average of 2,000 jobs per month. There was a decline of 217,000 temp jobs in 2023, and a decline of 106,000 temp jobs in 2022. Temp help jobs growth in 2021 was strong, with a total gain of 352,000 jobs, and an average of 29,300 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.
Source: G. Palmer & Associates; Bureau of Labor Statistics (BLS)
Source: Bureau of Labor Statistics (BLS)
A total of 8.8 million open jobs were reported by the BLS as of April 2, 2024. The BLS also reported that non-farm payroll employment increased by 303,000 jobs in March 2024, which was better than consensus estimate increases of 200,000 jobs. For the 2024 first quarter, there were 276,000 non-farm jobs added per month, up 4.2% year-over-year. For the 2023 full year, there were 2.96 million non-farm jobs added, an average of 247,000 jobs per month. There were 4.5 million non-farm jobs added in 2022, and 6.4 million jobs added in 2021. 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 in March are as follows:
- Total Non-Farm: +303,000
- Private Sector: +232,000
- Healthcare: +72,000
- Government: +71,000
- Leisure and Hospitality: +49,000
- Constructions: + 39,000
- Retail Trade: +18,000
- Professional and Business Services: +7,000
- Temp Help: -1,200
Source: Bureau of Labor Statistics (BLS)
In March 2024, the labor participation rate decreased 20 bps to 62.7%, from February 2024, 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 3.8% in March versus February.
As reported by the BLS, the rate of unemployment for workers with college degrees in March 2024 was down 10 bps to 2.1%, from February 2024. The unemployment rate for workers with less than a high school education decreased 120 bps to 4.9%. 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 unchanged at 7.3% in March from 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 employment market is showing further signs of slowing down. Until GDP growth resumes to a stronger level and interest rates start declining, growth will be nonexistent, and temp help demand will continue to be soft,” 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 2024, the temp help penetration rate decreased slightly to 1.75% 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%, which is another indication of temporary jobs lessening.
The American Staffing Association (ASA) Staffing Index was down, closing at a value of 90 on March 19, 2024, which was 8.4% lower than the same period last year,” Palmer added.
Source: Bureau of Labor Statistics (BLS)
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. FounderGreg 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.
