Labor Forecast Predicts 6.6% Decrease in Demand for Temporary Workers in 2024 Second Quarter
17 April 2024 - 1:00AM
via NewMediaWire – 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.
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
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.
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 Pondel/Judy LinPondelWilkinson
Inc.310.279.5980
Philip Boronow, Analyst G. Palmer &
Associates949.201.7296www.GPalmerandAssociates.com