A leading indicator of how well the economy will do points toward more tough times for the job market in President Barack Obama’s economy. When the economy is about to boom, companies start hiring more temporary workers. But in the last two months, the number of temporary workers hired has been declining.
According to the Washington Post, “recent trends point toward even slower job creation in the final months of the year than the sluggish hiring that has been evident throughout 2012.”
Alhough temporary employment makes up less than 2 percent of overall jobs, “when business is improving, companies may bring on temps to help fulfill that demand while waiting to see if that the uptick is sustained before hiring permanent workers.” The reverse is true when the economy is struggling.
According to the Post, “since 1990, the change in temporary employment over a three-month period has a 77 percent correlation with overall job growth in the ensuing three months.”
And in the past two months, “temporary-help employment has flattened,” falling by 2,000 jobs last month. In the first six months of the year, this sector, according to the Post, was adding an average of 21,000 jobs a month.
The growth rate for two prominent temporary employment companies — Manpower and Robert Half International — has been declining and much of that is due to the economic uncertainty made worse by Obama’s policies.
“If the historical relationship holds up, the weak growth in the third quarter would predict that overall job growth in the final three months of 2012 will be only 72,000 jobs a month, which would be not even enough to keep up with growth in the labor force,” the Post analyzed.