The Temp Staffing index hit a level not seen in the last 5 1/2 years last week. At 103 one has to go back to 2007 to find a comparable level. After being capped at 96 over the past half decade the index surged past that in ugust of this year and has not looked back
Here is the chart (click to enlarge):
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Now, typically what we see is the index top out and then begin a decline post Thanksgiving week that lasts until the end of the year. The last time we saw it go later (Mid Dec 2011, circled above) before topping out we saw Real Q4 GDP that year rise 4.9% and Q1 2012 rise 3.7%. Because of that the index bears close watching over the next few weeks. A sharp decline from here is what one would expect but anything to the contrary could mean good news for GDP watchers.
The knee jerk reaction of the bear will be to proclaim “Obamacare is skewing the data”. I address that fallacy here and for those who do not wish to read it, I’ll say Obamacare sucks, I hate it and it will NEVER save the US taxpayer a dime, but it is not goosing temp help numbers.
When we look at this and then think back to what we are seeing rail traffic doing, I think I am leaning toward the later date for the decline to start as I am in the “economy is gaining strength” camp (as I have been for some time).