The June Jobs Report was dismal enough. The top-line job growth number missed even the low end of expectations and the overall unemployment remained unchanged. But, tucked away in the report was a more ominous sign. Almost one-third of the jobs that were created were at temporary employment firms.
BLS reported that Business and Professional Services created 47k jobs in June, almost 6-in-10 of the total jobs created. Over half of these, though, 25k, were at temporary employment firms. This means that almost one-third of the jobs created were are temp agencies, a clear sign that employers remain hesitant about expanding their payrolls.
This isn’t a knock on temp agencies. They provide an invaluable service, allowing companies to be flexible and quickly adapt to changing markets. But, the sharp growth in their business suggest that businesses will explore every option before committing to additional hiring.
Analysts underestimate the incredible drag fiscal and regulatory uncertainty has on business and its hiring decisions. Anecdotally, I know of many businessman who would like to hire, but have no way to calculate what their future obligations will be. Hiring will not start again until this uncertainty is cleared up.
November, hopefully, will provide such clarity.
Follow me on Twitter here.