Calculated Risk: Diffusion Index and Temporary Help

The thinking is that before companies hire permanent employees following a recession, employers will first increase the hours worked of current employees and also hire temporary employees. Since the number of temporary workers increased sharply, some people think this might be signaling the beginning of an employment recovery.

However, there has been some evidence of a shift by employers to more temporary workers, and the saying may become “We are all temporary now!”, so use this increase with caution. For more, including some cautionary comments from a BLS economist on using temporary help, see Tom Abate’s article in the San Francisco Chronicle.

The problem, of course, is the fact that temps and perma-temps are the first to be terminated at the beginning of a business cycle downturn and the first to be hired when the cycle turns back upwards.  If you’re a temp, that is.  Read the entire SF Chronicle article.  It’s a good, short read.