The Jobs Picture

JobsThe Labor Department reported that a net of 88,000 non-farm jobs were added in March — far below expectations. Of the jobs created, 79,000 were service-related, and 16,000 jobs were in the goods-producing sectors. The winners were education and health services at 51,000, and construction had 18,000 new jobs. The weak spots in the period were in retail, where 24,000 jobs were lost followed by government declining by 7,000 and manufacturing by 3,000. For the most recent three-month period, average monthly non-farm jobs increased to 168,000 versus the previous three-month period’s average monthly of 157,000 of jobs.

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While these trends show improvement, it must be kept in perspective that between 2008 and 2009, 8.7 million jobs were shed from the economy and roughly 12 million people are still looking for work today. These latest statistics all point to a modestly improving labor market, but with an uneven distribution as it relates to new job growth. Although showing some improvement, the persistently high unemployment rate continues to have far-reaching effects across a broad spectrum of workers. Those at the lower end of the job market in terms of skills and education, along with workers in the government, are experiencing the greatest challenges. The unemployment rates have slowly trended down, but discouraged workers opting out of the ranks of those seeking jobs (478,000 in March alone) have boosted the rates of improvement and masked the fundamental weakness in the job market.

The commonly referred to unemployment rate, U3, decreased slightly to 7.6 percent in March 2013. As reported by the BLS, the rate of unemployment for workers with college degrees remained flat at 3.8 percent. The unemployment rate for workers with less than a high school degree during the same period decreased to 11.1 percent in March from 11.2 percent 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 lower by 50 basis points at 13.8 percent. The U6 rate is considered the rate that most broadly depicts those most affected by the downturn and measures the rate of discouraged workers.

Demand for temporary workers in the United States is expected to increase 5.9 percent on a seasonally adjusted basis for the 2013 second quarter, when compared with the same period in 2013, according to the Palmer Forecast™. The Palmer Forecast™ indicated a 4.7 percent increase in temporary help for the 2013 first quarter. Actual results came in as slightly higher at a 6.0 percent increase. Results, in part, reflected increasing uncertainty on behalf of employers with respect to permanent hiring.

Temp help created approximately 11.0 percent of new jobs reported since the recovery began, and 23 percent in March, while representing only about 2 percent of the total labor market. There is also speculation among industry veterans that the increase could be an early sign of the anticipated positive impact on temp labor relative to the Affordable Care Act, planned for implementation in 2014. At such time, companies may begin to increase the use of temp labor as a strategic measure to offset anticipated increases in health care costs.

MORE: Are Candidates Calling the Shots?

Greg Palmer

Greg Palmer
Greg Palmer is the former CEO of Remedy Temp Inc. and founder of GPalmer and Associates, a management-consulting firm focused on the staffing industry. You can find published GPalmer temp labor forecasts and related material on the GPalmer website

Greg Palmer

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