Temporary Staffing at Highest Level Since Mid-2009

Temporary Staffing at Highest Level Since Mid-2009


Temporary staffing, after floating aimlessly for much of the summer and fall took a swift upswing last week to the highest levels since mid-2009.   This means temp staffing is up >5% YOY and ~1.4% from August ’12, a strong showing.


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Here is the chart:
chart 1 1 624x216 Temp Staffing Jumps


Now we can’t deduce too much from one week as it is only one week and we do expect temp help to grow through year end.   It will be the YOY change we will pay attention to as well as the absolute #. I expect continued improvement and a modest YOY change. This is in keeping with the moderate growth outlook we have had all year and continue to have.

With housing recovering, auto sales expected to hit ~14.3M SAAR this year and 15M SAAR next year, odds of a recession are remote barring a huge systemic shock (prolonged war in middle east that makes oil go to $150, EU falls apart etc). We will continue to note that as long as we have increasing housing starts and increasing auto production, the US has never had a recession. Those saying we “are in one or entering one” no (ECRI?) are going against every economic cycle we have data for.  Since we see both housing continuing to expand and auto continuing to expand in ’12 and into ’13, it would take a large extraneous event to cause a recession (like listed above), not caused by the part of the business cycle we are currently in.


Here is the chart:


Capture625 624x378 Temp Staffing Jumps


Please note that both break and turn down well before a recession actually starts. Let’s not let those prone to hysteria or mellow dramatics scare you each time there is a monthly dip in either number.  They will ebb and flow.  But until we see a steady downward trend in both, a recession is not imminent.

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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”.

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