Labor Forecast Predicts 3.0% Increase In Demand for Temporary Workers for 2018 Second Quarter

NEWPORT BEACH, Calif., April 17, 2018 --

Demand for temporary workers in the United States is expected to increase 3.0% on a seasonally adjusted basis for the 2018 second quarter, when compared with the same period in 2017, according to the Palmer Forecast™, released today.

The Palmer Forecast™ indicated a 4.3% increase in temporary help for the 2018 first quarter. Actual results from the Bureau of Labor Statistics (BLS) came in lower at 3.7%, with 600 net temp help jobs lost in March but 19,000 temp jobs added for the quarter. Temporary help for the 2018 second quarter is anticipated to continue positive growth trends, regardless of the drop in March. The Bureau of Labor Statistics (BLS) recently made downward revisions to the initially published 2017 fourth quarter results which caused The Palmer Forecast™ prediction for the 2018 first quarter to be slightly higher.

“The 2018 first quarter marked the 33^rd consecutive quarter of year-over-year increases in demand for temporary workers, and our forecast for the 2018 second quarter predicts continued growth,” 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.

According to the BLS, 19,000 temp help jobs have been added in Q1 2018. Additionally, 136,000 temp jobs were added in 2017, an average of 11,300 per month, versus 32,000 temp jobs added in 2016, an average of 2,600 per month. In 2015, the agency reported approximately 97,000 temporary jobs added, compared with 162,000 new temp jobs in 2014, 139,000 in 2013, and 142,000 additional temp jobs in 2012.

The Labor Department also reported an additional 103,000 seasonally adjusted non-farm jobs in March 2018, which was below consensus expectations of 178,000, and 605,000 jobs were created in Q1 2018. For 2017, a total of 2.1 million new jobs were created versus 2.2 million new jobs in 2016. The year-over-year growth rate in March was up slightly at 1.55%, compared with 1.53% in February.

The key job categories of growth and decline are as follows:

• Non-farm jobs: +103,000
• Private sector: +102,000
• Government sector: +1,000
• Service providing employment: +87,000
• Professional and business services: +33,000
• Healthcare and social assistance: +33,800
• Manufacturing: +22,000
• Goods Producing: +15,000
• Construction: -15,000

U.S. employment trends are underpinned by near all-time lows in the labor participation rate. In March 2018, the participation rate ticked down 10bps from February to 62.9% and remains near all-time lows. The U3 unemployment rate, generally reported as the official unemployment rate, was unchanged at 4.1% in March 2018. As reported by the BLS, the rate of unemployment for workers in March with college degrees ticked down 10 bps from February to 2.2%, and the unemployment rate for workers with less than a high school education ticked down 20bps to 5.5%. 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 down 20 bps at 8.0% from February to March. The U6 rate is considered the rate that most broadly depicts those most affected by the downturn, and measures the rate of discouraged workers.

“One of the most revealing indicators to watch is the temp help penetration rate, which is significant because it measures temp help as a percentage of total employment. In March 2018, the penetration rate remained high at 2.04% of the total labor market versus a low of 1.3% in June 2009,” Palmer said.

The next few quarters…

The momentum in the temp help employment market continues to be positive due to GDP growth and the expected effects around lower corporate tax rates and less government regulation. With GDP forecasts in Q1 and Q2 2018 expected around 2.5%, growth is anticipated to continue at least through the first half of 2018.

However, employers still are reporting difficulty in filling vacancies, with nearly 6 million jobs remaining unfilled monthly. The key skill areas most severely impacted are those in health care, information technology, skilled trades and those positions that require high degrees of math and science. As of Q4 2017, the 10 most difficult positions to fill as reported by the American Staffing Association include:

Healthcare continues to dominate the list with eight of the 10 most difficult-to-fill occupations falling within that sector. The rankings are based on CareerBuilder and Emsi data.

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 S. Pondel/Judy Lin Sfetcu
PondelWilkinson Inc.
310.279.5980

Philip Boronow, Analyst
G. Palmer & Associates
949.201.7296
www.GPalmerandAssociates.com