September 03, 2010
OK, I couldn't resist the title & pic combo. But it IS nice to finally see a small suggestion of a bright spot in the employment situation. Below is a chart from the Mercatus Center at George Mason U. regarding temp staffing contrasted with payroll employment.
While the short text implies the fall in temp staffing is a bad sign, I have a somewhat different take seeing the two stats together*. The fall-off in temps staffing coincides with a positive uptick in payroll hiring, which strongly suggests that an equilibrium is being reached in payroll staffing. To wit, it suggests that employers have reached a point where they have quit downsizing and insuring against further decline, and for the moment are feeling comfortable with fully staffing at their current levels of production.
That's a far cry from actual growth, mind you, but given the very expensive mandates already shoved down their throats (ObamaCare, new taxes and regs), the threat of more to come (more tax hikes and even more burdensome regs), the weak economy and ongoing workout of bad assets from the real estate and fnancial bubble-bursts, amd the enormous uncertainties associated with all of the above, it's a positive indicator of equilibrial stabilization, perhaps due to watchful waiting ahead of the elections. Which beats the hell out of further decline and IMHO is a positive indicator of reduced "double-dip" potentials.
If the "watchful waiting" hypothesis is correct, evidence of it will be found in market trends tracking the polls the closer we get to the elections, and in the election-reaction market movements the first week of November, as election results are confirmed.
[*--Pay attention to the somewhat different scales so as to not get the two levels confused as being the same. Also, for those not used to reading such things, please note that positive/negative is where the lines cross their respective 0.0% lines, not where the trend direction changes. Payroll jobs did not start upticking in early-'09, for example, that's where the rate of losses started reducing. But increases in payroll employment do not begin until the 0.0% point was reached in the uptick of the trend, roughly May '10. And temp staffing did not hit 0.0% until July '10.]
Posted by Tully at 9:19 AM