Temp Employment UP 6.9% YOY And 22% YTD

Temp Employment UP 6.9% YOY And 22% YTD

The Temp Employment Index hit 91 for the week of April 15th. It is up 6.9% YOY and a stunning 22% YTD. The index continues to surge indicatoring increasing employment strength from late spring and now, into summer.

The “sell in May” crowd “may” be in store for a disappointment (sorry for that). The theory seems to be the US economy is weakening (this is based on a couple of week’s “not great” economic data) and we are in for a repeat of ’10-’11. Isn’t this the “recency bias”? For those not familiar with it, it is the tendency of investors to extrapolate recent events into the future indefinitely. So, because the late spring/summer of the last two years was bad, ’12 will be also.

But temporary employment tells us hiring is going to increase again May/June, rail data is telling us that an increasing amount of goods are being produced and shipped, auto sales continue to beat expectations and Q1 earnings numbers are thus far better than expected.

I don’t pretend to know what the market is going to do over the next 4 months (um, no one does so be wary of those who tell you they do) but I am becoming more confident of a stronger than expected spring/summer for the US (perhaps very much so). Those who are pessimistic in their expectations of the performance of the US economy over that time frame are not going to have those expectations met with reality.

Here are the charts:
Capture503 624x244 Temp Employment UP 22% YTD

Capture1176 Temp Employment UP 22% YTD

By: valueplays

About the Author

Todd Sullivan is a Massachusetts-based value investor and a General Partner in Rand Strategic Partners. He looks for investments he believes are selling for a discount to their intrinsic value given their current situation and future prospects. He holds them until that value is realized or the fundamentals change in a way that no longer support his thesis. His blog features his various ideas and commentary and he updates readers on their progress in a timely fashion. His commentary has been seen in the online versions of the Wall St. Journal, New York Times, CNN Money, Business Week, Crain’s NY, Kiplingers and other publications. He has also appeared on Fox Business News & Fox News and is a RealMoney.com contributor. His commentary on Starbucks during 2008 was recently quoted by its Founder Howard Schultz in his recent book “Onward”. In 2011 he was asked to present an investment idea at Bill Ackman’s “Harbor Investment Conference”.