Is the declining — however slightly — unemployment rate only temporary?
The Big Picture has crunched some jobs data that shows the difference in percentage increase of people working for temp (temporary) services vs. those who are holding permanent jobs has never been bigger.
Temp jobs are up 19.6% over last year, the largest increase since the Bureau of Labor Statistics began tracking the category. Take temp jobs out of the private-sector category, and the number of jobs has fallen .7% from a year ago.
There’s never been as big a gap before.
Historically — and I’ll admit going back only to 1990 isn’t a particularly robust data set — when temp jobs are up over 10% year over year, private sector jobs (less temp jobs) are running in the range, on average, of +2.4% YoY, not -0.7%. In the 20 year history of the series, never has the year over year gain been 10% or more while the private sector (ex-temp) has been negative. This is yet another variation on the theme of whether this may be As Good As It Gets.
Here’s what it looks like (click image for a larger version):
Steve Hine, the research director in the Labor Market Information Office at the Minnesota Department of Employment and Economic Development, was good enough to break down the Minnesota figures for the same categories.
“I used employment services, about two-thirds of which is temp help, as we don’t estimate at the same level of detail in many instances that the national figures are. But the story is indeed the same – we have 14.5% growth in employment services (through May – June data are out next week) with YoY losses in the rest of private employment,” Dr. Hine says.
In Minnesota’s case, however, it’s not a first-time experience. In 1991, the gap between the two was higher. There was a 27.8% difference. The gap was also double-digits in 1992, 1994, 1999, 2004, and 2006.
And the ’90s turned out to be pretty good for the economy. So perhaps the size of the gap doesn’t mean this is as good as it’s going to get, as the Big Picture suggests.