Recession Red-Flag Rears Its Ugly Head At Temp-Help Tumbles

Tyler Durden's picture

Ahead of the last two recessions, hiring by staffing agencies (ie: temp help) rolled over - it's now happening again.

Part-time employment has led the jobs "recovery" since the recession, leading to more than one in 50 US workers being employed as temporary help. The Sector has now plateaued, as the WSJ points out.

 

The last two times the temp-help sector slowed down, it eventually rolled over into a recession. If one believes this data point is a leading indicator, then we could be headed straight into yet another recession.

 

Of course, there are two ways of reading this data. The first being that unquestionably the data points to the economy being in trouble. Especially coupled with the fact that the average tenure for a temp employee is on the decline. In 2014 the average engagement was 11.3 weeks, while it was just 10.7 weeks last year.

"It's the first sector that really begins to lose jobs. If you start seeing those numbers go negative, you've got a real problem." said Donald Grimes, a labor economist at the University of Michigan.

The other way of looking at the data, if you like the way the economy is headed (and .5% growth rates), is to be optimistic that firms are now just shunning part-time help in favor of hiring employees full-time.

"When temp employment is moving sideways, as it is now, it could mean things are frothy and firms are jumping straight to permanent hires. Or it could signal we're on the precipice of a downturn and firms don't want to hire, and even start firing temp workers." said Erik Weisman, economist at MFS Investment Management.

While some try to create noise to justify the slowdown in temporary help saying that swings can be due to younger generation of workers bouncing around to find a work-life balance, the reality is that the economy is slowing crashing, and in looking at the recent PMI data, a recession is imminent.

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Boris Alatovkrap's picture

Temporary participation in fantasy economy by perpetually distracted citizenry… should be fun watch play out in ultimate conclusion.

Boris Alatovkrap's picture

In Russia, citizenry is pretend to work, government is pretend to pay. In USSA, same story, but is part time with Justin Bieber singing in background music.

Manthong's picture

Well, I guess the next step is going to be full-fledged serfdom.

maskone909's picture

FUCKING S&P STUCK IN A 5 POINT RANGE FOR LAST TWO SESSIONS!? THANKS JANET YOU FUCKING CUNT!

FreeShitter's picture

These hos at the fed aint loyal.

StackShinyStuff's picture

Just like "gift cards" and "snow in winter" they will find a way to explain this away

WTFRLY's picture

This seems like a good metric, disposable extra capacity fading is a troubling sign

Borrow Owl's picture

 

 " Justin Bieber singing "

 

 Isn't that an act of terrorism?

 

101 years and counting's picture

every week for the last 5 years a historic "recession signal" is flashing red......

Borrow Owl's picture

 None dare call it a depression.

 

Mr. Schmilkies's picture

Judging by the first chart, this is the 10th time the temp market has "plateaued" since the great recesion.   

N0TaREALmerican's picture

No worries,   the job market - like the stock "market" - has reached a permanent plateau.

i_call_you_my_base's picture

"due to younger generation of workers bouncing around to find a work-life balance"

I can't believe people can say this bullshit with a straight face. No one wants insecure, low-wage employment, at any age, in any generation.

Never One Roach's picture

"find work-life balance work" means finding a job that requires little skill and amost no work yet decent pay and all the benefits where you canno tbe fired.

 

... like a gubmint job.

farmerbraun's picture

The other way to do it is to be the  family farmer.

His work is his life.

What used to be known as a vocation.

Chuckster's picture

and?  Should I shit myself or should I go crazy?  Buy BIC products and store them away!  Lighters....razors.....

sgorem's picture

Hey, look at the BRIGHT side, LIFE is only TEMPORARY................meaning this is only a TEMPORARY imposition. no?.........................sarcasm.

sgorem's picture

"a work-life balance".......................lol.

Consuelo's picture

And don't forget a 'safe space'...

Mr. Bones's picture

I saw a lot of "now hiring every position" signs at a regional tourist destination this weekend.  Don't see that near home, a regional economic hub.

Shizzmoney's picture

If they need any help on how to rehypothecate these jobs to influx the numbers, just ask Jon Corzine.  

FreezeThese's picture

As long as VIX is sub 20 they win

Paul Kersey's picture

I must be living in a parallel universe, because I'm having to pay through the nose for subs, who are scarce and charging a hell of a lot more for their labor than they were during the 2005 housing boom. Even worse, so many of these guys are slaves to pain pills. Good, drug clean subs are hard to find, and they are expensive. Between land scarcity, sub scarcity and added regulations, the big builders can make it hard for us little guys to survive.

markitect's picture

How old are they?  I rememebr in the late 90s my buddies coulnt get into the trades around here because the unions were full and if you didnt have a connection you couldnt join or you were on a 5 year wait list.  Then during the boom it was last hired first fired.  Now I drive by the big projects and it looks like an old folks home, 55 year old dudes everywhere.  It seems the trades drove away the next generation in my area for so long theres no skilled young guys to do it.  

MrButtoMcFarty's picture

I usually use 2-3 temps during my busy summer season. I'm not this year...but nothing to do with slowdown in business. I'm pulling the plug completely this summer. There's a nice little ocean view condo in a surf town calling us home. 30 years of HARD WORK.....and just like that....we're gone.

;)

Consuelo's picture

Headbanger...!!!???

Farmer Joe in Brooklyn's picture

The only reason temp business has been so strong in recent years is Obamacare-avoidance.

Interesting even THAT is rolling over now...

Investment Grade's picture

Temp agencies screw the small employer with their wacked out fees for placement.  35-50% of first years' salary?  WTF?  I (in professional services) hire below the level where I'd have to offer health insurance, and place my ads on Craigslist or similar.   I get tons of resumes from people that in no way match the job I offer -- the unemployment for entry level, marginal professional services (think receptionist, file clerk, etc) is YUUUGE.  And yes, I have snagged some really good employees this way, with the only cost my time to review resumes where folks can't spell or write coherent sentences.

ThrownOffZHTwice's picture

In Bay Area, lots of "House for Sale" signs have appeared, all at ridiculous prices. There were none the last two years.  The "Apartment for Rent" sign outside my apartment complex, first time I've seen it in two years, has been there at least two weeks.  Something is happening.  Chinks and Wall Street have probably bailed on house purchases.   Looks like we have topped.

Youri Carma's picture

We are in a recession if you apply the non fudged numbers in inflation etc.

Sudden Debt's picture

EBT CARD FOR EVERYBODY!!!